PETALING JAYA: Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz (pix) reiterated that the Prosperity Tax is a one-off tax measure amid analysts’ fear of its reintroduction in the future.
He said the Prosperity Tax would not impact more than 250 companies, only companies with more than RM100 million in chargeable income would be taxed.
“The Prosperity Tax is one-off in this extraordinary time and it will be implemented in that spirit. It will be used to ensure the public health system is more resilient in the face of any threat in the future.
“We have seen several large corporations say that the Prosperity Tax will not affect their dividend payments. For example, Telekom Malaysia, Tenaga Nasional, and Axiata have supported this effort,” he said at the virtual Invest Malaysia 2021 Series 2.
There are more than 900 listed companies on Bursa Malaysia, of which 145 made over RM100 million in their financial year 2019.
“But in the financial year 2020, only 125 listed companies earned more than RM100 million. According to Bloomberg data, only 130 companies achieved the same pre-tax earnings level across the last two financial years. It is a very small number of companies on the stock exchange.
“Different countries have decided to permanently increase their taxes in the future as they recover from the Covid-19. For example, in the UK, corporate tax is increased permanently. Saudi and Indonesia have increased value added tax (VAT),” Tengku Zafrul said.
In the medium term, he said, the government is considering options to reduce the reliance on direct taxes and to widen the revenue base including shifting to a consumption tax base.
“More on this (will be discussed) when the Fiscal Responsibility Act table next year which will cover the medium-term revenue strategy and outline the stages of revenue measures. We want to review tax legislation and modernise revenue administration. The Prosperity Tax certainly does not fall in that spirit,” he said.
The finance minister said more reliable consumption tax will be explored as new taxation revenues such as taxation on the digital economy.
“As part of the 12MP (12th Malaysia Plan), the government is now looking into imposing the carbon tax. The finance ministry is working with the environment and water ministry on the imposition of the carbon tax,” he said adding that the government will continue to assess the entire revenue ecosystem.
