On the surface, the writer argued correctly that our cars are priced unfairly higher than the global market price. The amount of excise duties and sales taxes that one has to pay for a car can amount to tens of thousands of ringgit.
And the writer correctly pointed out that the Thais don't have to pay much for their driving licences and road tolls.
What the writer failed to realise is that our neighbours have to pay one form of tax that we don't have to pay - the Value Added Tax (VAT), also known as the Goods And Services Tax (GST).
Malaysia is one of the few major trading countries in the world that has yet to implement the GST. Almost all the major trading nations have implemented the GST, with the exception of the US.
Our neighbours such as Singapore, Thailand, Indonesia, the Philippines, China, Japan, Australia, New Zealand and even Vietnam, have all implemented the GST.
As we have failed to introduce a broad-based consumption tax such as the GST, and because only 5% of the population pays income taxes, we have to rely on old forms of taxation.
Besides this, we also have to retain huge shareholdings in all kinds of businesses such as electricity distribution, telecommunications, plantations, oil and gas, airlines, car manufacturing and highway construction to fund the national budget.
Currently, a couple with a combined RM72,000 annual income, pays no income tax. But if we had implemented the GST, the couple would have to fork out thousands of ringgit in consumption taxes yearly.
Currently, the millions of our foreign workers pay no income tax. With the GST, even the lowly cleaner would end up pay something because it's very difficult to evade this form of tax system.
Who benefits the most from our failure to get rid of our old tax systems? Well, the rich, our neighbours and our competitors, of course. Because we did not implement the GST, our corporate and personal income tax rates cannot be lowered, making us unattractive for investments.
Another example of an old tax system that we have failed to get rid of is our four-decade old company laws. Our small private companies are still subjected to stringent requirements such as external audits and the publishing of financial results as if they are public listed companies.
Because of our inability to reform our company laws as well as introduce new forms of business such as the Limited Liability Partnership (LLP), we are, in a sense, subsidising our competitors.
Our system of price controls is benefitting our neighbours greatly. Look at the number of Thai and Singapore vehicles that cross over daily to buy our artificially-set, low price fuel.
Many countries have eliminated price controls because they encourage wastage, shortages, hoarding and smuggling. We still have price controls because we do not have any competition or anti-trust laws.
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