KUALA LUMPUR – The government is cautious about introducing new tax policies for companies making extraordinary profits during the Covid-19 pandemic for fear of losing investments, the Dewan Rakyat heard today.
Deputy Finance Minister I Mohd Shahar Abdullah (Paya Besar-Umno) said the ministry cannot afford policies such as a windfall tax given the larger impact on the financial ecosystem.
“We must take into consideration the investments made in this country, whether foreign or local.
“If there are any new policies or taxes introduced, just by taking into account the extraordinary profits made, this will also affect investors’ willingness to invest in Malaysia.
“We must be careful with what we do.”
He was replying to a supplementary question from Syed Saddiq Syed Abdul Rahman (Muar-independent) on Putrajaya’s reluctance to introduce a windfall tax for rubber glove firms that are raking in huge profits amid the pandemic, and whether these companies are politically funding parties in the government.
Syed Saddiq sought a detailed spending breakdown of the RM400 million that the government, during its Budget 2021 tabling last year, said would be collected from glove manufacturers.
To this, Shahar said the contributions have been made by the companies, and that the sum has been allocated for Covid-19-related spending. However, he stopped short of giving a detailed explanation.
This is not the first time Syed Saddiq has urged the government to impose a windfall tax on firms making large profits, having made similar calls last year.
Last November, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz said introducing such a tax will send the wrong signal to investors, and will make them consider investing elsewhere. – The Vibes, September 23, 2021
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