This is a conceptual paper discussing on the increase of tax rate and broader tax base especially involving indirect tax type that are always occur and unavoidable especially in developing countries like Malaysia. Both individuals as well as the overall economy may be significantly impacted by changes in tax rates. Increases in tax rates typically result in lower disposable income for both individuals and corporations. In general, lower tax rates can boost economic activity and growth through stimulating spending and investment. Nevertheless, increase in tax rates will increase the revenue of tax collected by tax administration for the government. This should lead to the increase of the efficiency of the tax administration if it is measured by using the cost-revenue ratio; with the assumption of cost incurred would remain the same. The precise effects, however, vary depending on a number of variables, such as the degree of the tax rate change, and the overall condition of the economy. Investigating and understanding the effects of increasing tax rates is crucial because they frequently lead to diminish Gross Domestic Product (GDP). It is a matter of question whether a higher efficiency of tax administration through the increase of tax revenue collected is achievable as low GDP indicates low investment and local consumption of which directly affect the revenue collected by the tax administration.