Cukai Makmur to be scrapped?

By ZAIDI ISHAM ISMAIL
[email protected]

KUALA LUMPUR Jan 24 - Speculation is rife that the unpopular cukai makmur could be scrapped.

Industry sources said the dreaded prosperity tax or more popularly known as cukai makmur will be taken out in view of the upcoming 15th general election.

"The election is just around the corner and I suspect it will be scrapped altogether," said a fund manager at Permodalan Nasional Bhd.

He added when the tax was announced, it was aimed at pressuring the super-rich firms to help the government fight the pandemic.

But some politicians are adamant that companies pay the prosperity tax while had other politicians opposed the tax and the issue was politicised.

"The cukai makmur mainly targeted the rubber glove sector which made billions of ringgit of profit in 2021 and perhaps this year due to high global demand.

However, the issue has tapered down and I suspect the authorities will yank out the cukai makmur agenda in 2022 ahead of the GE.

''The GE could happen this year or next year," said the analyst.

Cukai makmur is actually the windfall tax which is imposed on companies which made astronomical profits during the pandemic.

They include rubber glove companies, logistics and e-commerce firms.

Proposed under Budget 3022, the tax affects some 200 companies out of 1,400 companies listed on Bursa Malaysia.

Analysts said if the cukai makmur proceeds, the government is expected to collect some RM3 billion to RM 4 billion in taxes.

"This is a normal development in Malaysia.

"Shock and burn the companies by announcing the cukai makmur to win votes and portray the government as caring.

And then as the election nears, scrap the tax to fish for votes," said the analyst.

However, an International Trade and Industry Ministry official said the government should scrap the tax altogether as it will scare away investors.

"The government should drop the tax as it will only spook investors.

Investors come here to maximise their profits and if this measure is in place, it will only give the investors the jitters.

As a result, they will invest elsewhere and not consider Malaysia on their investment radar.

"Remember, investors want a level playing field and not be burdened by these sorts of taxes," said the source. - DagangNews.com