Less Number of Taxes or Lower Rates of Taxes?

  Before I start to compose this post, I would like to explain something. This is just an economic article, it is nothing to do with any political issue. So, please do not write anything related to political issues in the comment space since it may offend the National Law.
  Now, I am going to write this article. The idea actually comes when I read the newspaper today. The government is going to lower the rate of the individual income tax so that it will release the citizens’ burden. However, the idea is still in planning stage and has not been introduced in the parliament yet.
  Relating this, I am going to say something in the aspect of the economic theory. In economics, as what we know, the rate of taxes will be only lowered if the country experiences deflation. The reason is just simple, that is to increase the monetary supply among the consumers.
  However, in my view, our country does not show any symptom of deflation. The price of the goods is still high due to some of the firms which abuse the implementation of the Goods and Service Tax (GST). The idea of GST is actually good but the way of execution spoils the idea. In economics, inflation is actually defined as the continuous increase of the price of the goods. So, our country obviously does match the symptom of the phenomena.
  The reason given by the government for lowering the rate of the income tax really made me speechless. They said they had collected the enough amount of GST upon the implementation. I took quite much time to rethink of the statement released from the government. This is really nothing to do with the economic situation today. The lowering of the rate may make the citizens glad, most probably by this the government can get more attention from the citizens in the next general election.
  By the way, I think they should explain more on the GST amount they collect since its introduction on 1st of April 2015. How much did the government earn in this 2 years and 4 months of implementation? I think we should be able to get the rough amount even though they did not announce it (but they actually did).
  In the early of the implementation for GST, I still remember that everyone is blaming the government, since they have to pay more taxes to the government. However, in my opinion, this is really necessary to the nation for the continuous development and the sustainability of the financial status of the country. Nowadays, GST is already familiar for you and I.
  Back to our topic, is it better for us to have less number of taxes or lower rate of taxes? Both are good, it just depends on how we think. :-)

13-08-2017
2.50 pm