KUALA LUMPUR – Cukai makmur, or the prosperity tax proposed in Budget 2022 can help finance the country’s high healthcare costs as it is still waging war against the Covid-19 pandemic, said Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz.
Tengku Zafrul said the government decided to introduce the one-off special tax after conducting a thorough study supported by experts in the field.
“We want to take a holistic approach. In other countries they call it a progressive or prosperity tax, so we only look at companies that have made extraordinary profits during the pandemic,” he said during a special interview themed “Budget 2022 From Rakyat to Rakyat” on Bernama TV and Astro Awani last night.
Tengku Zafrul said after conducting a study, the government was of the opinion that companies with a profit of more than RM100 million would be subject to income tax at a one-off rate of 33% for the 2022 assessment year.
The tax will be 24% for the first RM100 million.
He said among the issues brought up during the Finance Ministry’s engagement sessions were tax collection and how it should be implemented.
“The proposals included the introduction of a windfall tax and a capital gains tax and we have considered both.
“A capital gains tax is a little difficult because it has a negative impact on the stock market and we have foreign investors, as well as local investors such as the Employees Provident Fund, Permodalan Nasional Bhd, Tabung Haji, and the Armed Forces Board," he said.
Tengku Zafrul said neighbouring countries also did not take the approach of imposing a capital gains tax on their companies.
Some suggested that a windfall tax should be imposed on glove companies, he said, adding that “in principle, if we were to impose a windfall tax on an industry, this will hinder foreign direct investments as foreign investors will think that they will be taxed if they make extraordinary profits,” he said. – Bernama, October 31, 2021
