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Malaysia Shows Signs of Recovery: Latest Tax Developments examined
Malaysia is showing strong signs of economic recovery, with a growth rate of 10.1% in the first quarter, reflecting the fastest growth Malaysia has seen in the last decade. The Government expects the overall growth rate to be about 6% for 2010. However, concerns regarding the fiscal deficit remain, as the Government continues to grapple with ways to ease this. It was recently announced that the aimis to reduce the fiscal deficit from the current level of 5.3% of gross domestic product (GDP) to less than 3% of GDP by 2015. Taxand Malaysia examines the latest tax developments.
The most recent measure to reduce the deficit has seen the reduction in fuel and sugar subsidies, from which the Government hopes to save RM750 million. Undoubtedly, as the Government plans for the 2011 Budget which is expected to be announced on 15 October, 2010, this issue will be a matter of high priority.
From a Malaysian tax perspective, the last quarter has seen the introduction of various gazette orders, public rulings, double tax agreements, etc. From an international perspective, there are some interesting case lawdevelopments, the proposed introduction of Value Added Tax (VAT) in Pakistan, changes to the OECD model tax treaty, for example.
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Read the latest Malaysian and international tax developments from Taxand Malaysia below: