Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz has said that the government is constantly reviewing the country’s tax system to be more equitable and fairer. This came amidst rising concerns that the Covid-19 pandemic would increase wealth disparity within Malaysia, leading to a growing call for the implementation of wealth tax.
“Constant initiatives are being undertaken to study our tax system holistically so that it is efficient, fair, and equitable,” said Tengku Zafrul in a Parliament session, adding that the government is also exploring new potential revenue sources to finance the economic recovery. In turn, this would involve engaging stakeholders to get feedback about the possible effects of implementing these new taxes.
Calls to introduce new taxes that tap into the wealth of elites and their businesses have been escalating over the last two years as wealth inequality in the country worsened in aftermath of the pandemic. The suggested taxes include capital gains tax, inheritance tax, and windfall tax – which, if implemented, will see the elite group be taxed on gains such as dividends from stocks or inherited wealth. These are currently listed as non-taxable income.
Tengku Zafrul was also questioned about the introduction of wealth taxes as the government is set to increase the statutory debt ceiling from 60% of gross domestic product (GDP) to 65%, allowing it to raise an additional RM45 billion for pandemic spending. He was asked if these taxes will be implemented to help raise the money, and subsequently clarified that the additional Covid-19 spending will be funded by borrowings.
(Source: Malay Mail)
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