Windfall tax a short-sighted approach, says Chin Tong

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PETALING JAYA: DAP’s Liew Chin Tong has rejected the idea of a windfall tax on glove-making companies, calling for such firms to hire more local workers instead.

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Liew said it was unfair to tax glove makers as the pandemic was beyond their control and they were only “in the right place at the right time”.

“A flourishing private sector requires a stable and predictable regulatory environment. A windfall tax is the opposite of that,” the senator said in a statement today.

Former minister Syed Saddiq Syed Abdul Rahman had previously suggested that Putrajaya impose a windfall tax on glove companies that had made huge profits amid the Covid-19 pandemic.

In response, Finance Minister Tengku Zafrul Aziz said the tax would do more harm than good as it could send the wrong signals to investors.

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

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“With a carrot to incentivise the glove sector to automate, and with a stick to make the hiring of cheap foreign labour more expensive, the government can guide the glove industry to create tens of thousands of jobs for Malaysians,” he said.

Meanwhile, Sabah DAP secretary Chan Foong Hin questioned glove makers’ exemption from a profit tax during the pandemic, when the oil palm industry was still required to pay a levy.

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

Noting the lack of foreign worker supply and that many estate owners have had to spend more on preventive and precautionary measures, Chan urged the government to suspend all forms of windfall profit tax on the sector for the time being.

PKR’s Subang MP Wong Chen expressed similar sentiments, saying the government should expand its exemption policy to the oil palm sector to ensure a consistent investment and tax environment.

He also said the introduction of a new tax could negatively impact the stock prices of these companies and “erode” investors’ confidence in Malaysia.

Wong Chen said another “limited solution” was to review and adjust the existing two-tier corporate tax system to obtain some of the extraordinary profits, with companies given reasonable notice on a change in tax policy in advance. – FMT

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