Tax Reform: Is it Welfare-Enhancing or Welfare-Reducing?

  • Roshaiza Taha Universiti Malaysia Terengganu
  • Norsiah Ahmad Universiti Sultan Zainal Abidin
  • Wan Anisah Endut Universiti Sultan Zainal Abidin
  • Saeed Rabea Ali Baatwah Shaqra University
Keywords: Tax reform, price of goods and services, poverty and household income


The ongoing tax reform in Malaysia has triggered our motivation to understand the effect of such reform on the public since the government has continuously emphasised that the changes would not burden the consumer. Whether this is a myth or reality is deemed interesting to ponder upon. Thus, this study aims to provide evidence concerning Malaysian tax reform on consumer welfare by looking at the price effect, consumer burden, and inflation. Price observations of the pre-, during and post-reformation period were conducted to provide meaningful evidence. Interestingly, the outcome of the observation rules out the public accusation that the tax reform would boost the price of goods and services and further result in a welfarereducing event. Also, a review of the recent statistics on poverty incidence does not show a negative effect of tax policy changes on society’s welfare. It is hoped that the discussion provided in this paper will shed light on the impact of tax reformation in Malaysia, albeit a further thorough examination might be required. 


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How to Cite
Roshaiza Taha, Norsiah Ahmad, Wan Anisah Endut, & Saeed Rabea Ali Baatwah. (2020). Tax Reform: Is it Welfare-Enhancing or Welfare-Reducing?. International Journal of Business and Society, 21(3), 1101-1112.