By ZAIDI ISHAM ISMAIL
KUALA LUMPUR Nov 3 - There were many goodies announced under Budget 2022. However, one tax measure stuck out like a sore thumb: the prosperity tax or more popularly known as the cukai makmur.
Cukai makmur is a milder term for the windfall tax slapped on companies which make astronomical amount of profits.
In this case, the targeted firms are obviously the rubber glove companies which by and large made billions of ringgit in profit in a single financial year alone namely in 2020 and 2021.
And perhaps to a certain extent, the ICT firms, logistics and e-commerce also made ridiculous amount of cash during the pandemic as most people stayed at home to shop online.
But is it fair to impose the one-off cukai makmur on these "selected" companies?
Under Budget 2022, cukai makmur is the taxable corporate income of 33% for companies which earns more than RM100 million (after the standard corporate income tax rate of 24%).
This affects 234 companies out of the 1.4 million companies listed on Bursa Malaysia
A tax consultant said in all fairness, it is the government's prerogative to collect the tax.
"However, what everybody is questioning right now is the timing of the tax because almost all firms are affected by COVID-19.
"It should be postponed when the economy gains traction," the tax consultant told DagangNews.com.
He added it is unfair for the government to tax companies due to its inefficient tax collection system in the first place.
It's high time that the government revert back to the GST which is obviously a better tax regime," the consultant told DagangNews.com.
Furthermore, this cukai permai will definitely scare investors away especially the foreign investors.
The cukai permai set at 33% is far higher than the corporate taxes in Hong Kong (16%), Singapore (17%), Indonesia (22%) and Vietnam (20%) to name a few.
The investors plough their money to earn share dividends and if this income is less due to the cukai permai, investors will definitely park their money elsewhere.
Bear in mind that investors especially foreigners want a level playing field sans any trade protective measures.
Whichever way, the stock market protested on Monday which saw RM33 billion worth of market capitalisation wiped out when the market buckled.
Datuk Seri Najib Razak said on his Facebook posting : Is the RM33 billion loss comparable to the RM3 billion expected to be collected by cukai makmur?
The investors have spoken. – DagangNews.com