'Tax rates can be reduced from time to time'

Prime Minister Datuk Seri Najib Razak said tax rates can be reduced from time to time depending on the long term trend of the economic development model implemented by the government.

He said the reduction of tax rates would also be based on the government's ability to increase the country's income and revenue.

"One of the successes we created over the past few years is that we have managed to reduce tax rates while our revenue increased.

"This is a very special achievement recorded only by Malaysia," he told reporters after the launch of Perak Urban Transformation Centre (UTC) on Friday.

Najib said Malaysia was holding firmly to the principle "towards a high-income nation with low tax rates".

"However, this does not meant that we have to reduce the tax rates every year. We have to look at the long term trend," he said.

In his speech earlier, Najib said the highest personal income tax rate ever recorded in the country was 25 per cent as compared to 75 per cent in France.

"France is a high-income nation, but its maximum tax rate has even reached 75 per cent, which means that for every dollar spent in certain level, 75 cent must be paid to the government.

"Of course many people in France think that this is unfair and some of them have probably migrated to other countries, but we still choose to fix low tax rates for our country," he said.

The prime minister said apart from focusing on increasing the income, the government was also giving extra attention on the people's wellbeing.

"If matters close to the people's hearts are ignored and neglected by the government, the people will neither be satisfied nor feel that their wellbeing are being taken care of even though the income keeps rising," he said.

Najib said the government would also ensure that the social safety net would be strengthened without having to turn Malaysia into a welfare state.

He said the social safety net, comprising various assistance for the people, such as the 1Malaysia People's Aid, 1Malaysia People's Clinic and 1Malaysia Schooling Aid, had not only helped the people, but also helped in developing a sustainable economy.

Present at the launch were Menteri Besar Datuk Seri Dr Zambry Abdul Kadir, Chief Secretary to the Government Datuk Seri Dr Ali Hamsa and Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.