Global Tax 50 2014: Najib Razak

International Tax Review is part of Legal Benchmarking Limited, 4 Bouverie Street, London, EC4Y 8AX

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Global Tax 50 2014: Najib Razak

Malaysian prime minister

Najib Razak

Najib Razak is a new entry this year

Following a succession of many leaders whose popularity dropped after increasing taxes, last year Malaysia's Prime Minister Najib Razak announced that from April 2015, a 6% goods and services tax (GST) would replace the outdated sales and service taxes. Despite criticism, Razak has adamantly maintained that broadening the tax base is an important step in Malaysia's transition from a developing to developed country.

"We are one of the very, very few countries in the world which does not have a GST. But there are challenges. Anything to do with any new form of tax, like consumption tax in Japan, carbon tax in Australia, these are big issues that cannot be easily decided," said Razak.

The 6% GST is meant to raise a total of 23.2 billion ringgit ($6.78 billion) in its first year. The amount will eclipse the funds raised from the previous sales and services taxes, with much of the excess being used for assistance programmes. The government has been working hard to prepare itself and taxpayers, seconding professionals out to firms and bringing professionals in from abroad to train staff domestically. Razak also pledged RM 4.9 billion ringgit ($1.4 billion) to help low income households during the transition.

In his 2015 Budget, Razak expanded on the exemptions in his 2014 Budget. Some basic food items such as bread and coffee, more than 2900 medicines, health and education services, will be exempt.

Though the unpopular GST has knocked Razak's domestic approval ratings, tax professionals can thank him for the increasing demand in their services. In addition to government preparation, an inflow of professionals have been brought in to train private lawyers and accountants to handle GST related issues.

Razak's influence does not stop at Malaysia's borders, either. Fellow ASEAN members Vietnam and the Philippines may follow suit by introducing GST and will be watching Malaysia as it implements the new tax. The government has announced a one year grace period before corporations will be punished for not being compliant or having incorrect paperwork.

Though it has been his most ambitious tax policy, GST is far from Razak's only major fiscal reform. The corporate tax rate will be reduced by one percentage point in 2016 to 24%. Razak is reducing individual income tax in 2015 by between one and three percentage points, depending on income brackets. In 2014, he also increased real property gains tax and minimum property purchase price for foreign residence owners to help cool the housing market.

2015 will be a crucial year for the Razak regime as tensions, criticism, and spending rise in the lead up to the April 1 GST implementation date.

Further reading

Malaysia's Budget cuts corporate tax rate, but only in two years

Malaysia likely to achieve GST in 2015


The Global Tax 50 2014

View the full list and introduction

Gold tier (ranked in order of influence)

1. Jean-Claude Juncker  2. Pascal Saint-Amans  3. Donato Raponi  4. ICIJ  5. Jacob Lew  6. George Osborne  7. Jun Wang  8. Inverting pharmaceuticals  9. Rished Bade  10. Will Morris


Silver tier (in alphabetic order)

Joaquín AlmuniaAppleJustice Patrick BoyleCTPAJoe HockeyIMFArun JaitleyMarius KohlTizhong LiaoKosie LouwPierre MoscoviciMichael NoonanWolfgang SchäubleAlgirdas ŠemetaRobert Stack


Bronze tier (in alphabetic order)

Shinzo AbeAlberto ArenasPiet BattiauMonica BhatiaBitcoinBonoWarren BuffettECJ TranslatorsEurodadHungarian protestorsIndian Special Investigation Team (SIT)Chris JordanArmando Lara YaffarMcKessonPatrick OdierOECD printing facilitiesPier Carlo PadoanMariano RajoyNajib RazakAlex SalmondSkandiaTax Justice NetworkEdward TroupMargrethe VestagerHeinz Zourek

more across site & shared bottom lb ros

More from across our site

Effective audit management requires more than documentation; it’s the way taxpayers engage that can shape audit direction, manage procedural ambiguity, and preserve options for appeal or litigation
American advisers are falling short of client expectations when it comes to providing value-added services, but remaining tight-lipped won’t make the problem go away
Awards
The Social Impact Awards unveil new categories to reflect a changing legal and social landscape
Australia's approach to tax policy has undergone significant shifts in recent years, reflecting global trends and unique domestic considerations. These developments merit close attention from tax professionals
The UK has temporarily dodged the 50% rate due to a trade deal signed with the US in May; in other news, Ryan acquired a Northern Irish tax firm
Following a $28 million funding round, Aibidia wants to ‘double down’ on the US market via partnerships with the ‘big four’, the Finnish TP tech provider’s CEO tells ITR
The Luxembourg-based TP leader tells ITR about relishing the intellectual challenge of his practice, his admiration for Stephen Hawking, and what makes tax cool
The case to determine whether the tariff regime is constitutional will eventually find its way to the US Supreme Court, ITR has also heard
In other news, the Council of the EU pledged support to a CBAM simplification and exemption initiative, and Portugal issued new VAT filing guidance
While Brazil’s sweeping tax updates are a triumph for modernisation, Giuliano Gioia of Sovos warns that MNEs with a Brazilian footprint should be prepared for a short and sharp adjustment
Gift this article