KUALA LUMPUR: The government is expected to introduce five new taxes in the 2025 Budget, aimed at promoting healthier lifestyles and sustainable living.
As reported by Utusan Malaysia, the proposed taxes include the unhealthy food tax, carbon pricing tax, inheritance tax, high-value goods tax (HVGT), and Artificial Intelligence (AI) tax.
The report said economic analysts expect the unhealthy food tax to be implemented in response to rising obesity rates and lifestyle-related health issues, as indicated by the 2023 National Health and Morbidity Survey (NHMS), which found that 54.4 percent of Malaysians are overweight.
The carbon pricing tax is designed to support the country's economic agenda and combat climate change, in line with the goal of achieving net-zero carbon emissions by 2050.
Additionally, the inheritance tax aims to prevent the accumulation of unproductive wealth within families, which could help reduce wealth inequality.
The HVGT will allow the government to generate revenue from high-income individuals who purchase luxury items, thereby addressing the wealth gap, while the AI tax is intended to foster the growth of high-tech industries to bolster economic development.
Analysts also believe that, in light of the current economic landscape, the government will remain focused on establishing a more progressive tax system, including expanding the use of e-invoices to enhance revenue collection.
Universiti Sultan Zainal Abidin (UniSZA) senior lecturer at the Faculty of General Studies and Advance Education Dr Farah Roslan said the unhealthy food tax complements the existing sugar tax aimed at tackling obesity and related health issues.
"While the sugar tax applies to sugary drinks, the unhealthy food tax will broaden its scope to include foods high in fat, sugar, and calories, such as fast food, snacks, and baked goods. This measure is expected to decrease unhealthy food consumption and encourage healthier choices.
"The revenue generated from both taxes can be used to subsidise healthy foods and to implement nutrition education programmes in schools and communities," she noted.
She also highlighted that countries like Hungary and Mexico have successfully implemented similar taxes.
Meanwhile, Universiti Kebangsaan Malaysia (UKM) Faculty of Economics and Management Associate Professor Dr. Mustazar Mansur said the unhealthy food tax aims to lower the consumption of fatty and sugary foods that significantly contribute to chronic diseases like diabetes, high cholesterol, and heart disease.
"This measure seeks to control the intake of foods harmful to public health and is part of the government's effort to tackle the growing burden of non-communicable diseases (NCDs) among Malaysians," he explained.
Dr Mustazar noted that the government might also introduce taxes that align with the green economy agenda and initiatives to combat climate change, including carbon pricing, such as the emission trading system (ETS) and carbon taxes.
He said the ETS establishes a market for greenhouse gas emissions by capping emissions that companies can sell by reducing their outputs, while carbon taxes are directly imposed on emissions based on the carbon content of fossil fuels.
Mustazar said carbon taxes guarantee a price on emissions without capping them, adding that as of last year, 75 carbon pricing mechanisms have been successfully implemented worldwide to reduce carbon emissions and increase national revenues for green investments.