Free Malaysian Today (12/10/2021) - KUALA LUMPUR: A Pakatan Harapan MP has called for Putrajaya to do away with any form of windfall tax if it wants Malaysia to become among the centres of commerce and industry in the world.
DAP’s Ngeh Koo Ham (PH-Beruas) told the Dewan Rakyat that investors needed certainty when it came to taxes, while schemes such as windfall levies should not be imposed suddenly and at a whim.
He warned that the tax scheme would drive investors, both foreign and local, away to set up operations elsewhere, where the business environment was more favourable.
He added that these traders would have suffered losses from time to time, pointing to the various financial crises that have occurred almost every decade.
“It (windfall tax) is a short-term gain but long-term pain. Although traders and industry players sometimes gain extraordinary profits, they also suffer catastrophic losses at times, forcing their businesses to be closed and losing their investments.
“Therefore, in a situation where they earn extraordinary profits, traders should be allowed to enjoy it, as it helps them regain their investments,” he said while debating a bill to amend the Windfall Profit Levy Act 1998.
Ngeh pointed out that Stanley Thai, former head of glovemaker Supermax Corporation Bhd, had seen another rubber glove manufacturing firm he led go bankrupt and wind up its business in 2009.
“So, we must know about the risks for each industry and be satisfied (with existing tax schemes). If they gain extraordinary profits, the government already imposes an income tax of 24% on these firms,” he said.
For the palm oil industry, Ngeh said there were four types of taxes already imposed on top of the windfall levy, comprising the Malaysian Palm Oil Board’s cess, export tax, sales tax for those in Sabah and Sarawak as well as corporate and individual income tax.
“All five tax schemes combined equalled 60% of corporate tax,” he said, questioning if this was fair on industry players in the palm oil sector.
“That’s why Indonesia is ahead of us now when we used to be the leaders in this industry. The environment there is more favourable for the industry’s development,” he said.
Read more at https://www.freemalaysiatoday.com/category/nation/2021/10/12/do-away-with-windfall-tax-says-dap-mp/