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Windfall tax a short-sighted approach, says Chin Tong

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Windfall tax
Finance Minister Tengku Zafrul Aziz has said a windfall tax on glove makers would send the wrong signals to investors. (Bernama pic)

PETALING JAYA: Liew Chin Tong of DAP has opposed the concept of a windfall tax on glove-making firms, calling instead for more local employees to be employed by such companies.

Liew said taxing glove makers was unjust as the pandemic as was beyond their control and at the right time they were only in the right place.”

A secure and consistent regulatory climate needs a thriving private sector. A windfall tax is the reverse of that the senator said today in a statement.

Previously, former Minister Syed Saddiq Syed Abdul Rahman had proposed that Putrajaya place a windfall tax on glove firms that made enormous profits in the midst of the pandemic of Covid-19.

In response, Minister of Finance Tengku Zafrul Aziz said the tax would do more harm than good. It is because it might give investors the wrong signals.

As an alternative, by recruiting Malaysian employees through a “automation and Malaysianisation programme,” Liew called on the manufacturing sector to rely less on foreign labour.

Create tens of thousands of jobs for Malaysians

“The government can guide the glove industry to create tens of thousands of jobs for Malaysians with a carrot to encourage the glove sector to automate. And also with a stick to make the hiring of cheap foreign labour more costly,” he said.

Meanwhile, during the pandemic, when the oil palm industry was still expected to pay a levy. Sabah DAP Secretary Chan Foong Hin challenged the exemption of glove makers from the benefit tax.

The industry as a whole is just about to rebound from the sustained low prices of palm oil. It has suffered over time in terms of low profits and even losses,” the Kota Kinabalu MP said.”

Chan urged the government to suspend all forms of windfall benefit tax on the sector for the time being, noting the lack of availability of foreign workers and that many property owners had to spend more on preventive and precautionary measures.

Subang PKR MP Wong Chen shared similar sentiments. He is saying the government should extend its oil palm exemption policy to ensure a clear investment and tax climate for the oil palm industry.

He also claimed that the implementation of a new tax could adversely affect the stock prices of these companies. It also “erode” the confidence of investors in Malaysia.

Another ‘tiny option’ was to examine and amend the current two-tier corporate tax structure to obtain some of the exceptional income. Wong Chen said with businesses receiving fair notice in advance of a change in tax policy.

 

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Windfall tax a short-sighted approach, says Chin Tong

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