KUALA LUMPUR, May 22 — More taxes should be imposed on profitable monopolies and high income earners before Putrajaya resorts to the Goods and Services Tax (GST), said PKR strategy director Rafizi Ramli.
In a report by Malay language daily Sinar Harian today, the Pandan MP pointed out that there are no legislations to implement “capital gains tax, [windfall] tax or super rich tax.”
“Why impose GST on the average citizens, no matter young, old, poor or the disabled?” he asked at the “GST: Who profits and who loses?” forum organised by the newspaper.
The Malay daily, in its report on the forum, quoted Rafizi saying that the when the concern was raised in Parliament, the Finance Ministry had rejected the proposal saying the other taxation systems were “inappropriate for Malaysia”.
Capital gains tax is applied on profit made commonly from the sale of stocks, bonds, precious metals and property, while windfall tax is charged on highly profitable corporations and monopolies.
India is among countries that impose a “super rich” tax, applying steeper rates on personal taxation for incomes above 10 million rupees (approximately RM550,000).
In Malaysia, highest personal income tax bracket is reached at RM100,000 annually and is capped at 26 per cent.
“This situation has allowed the rich to obtain grants and major projects, particularly from the government, and continue to reap profits while the people in the lower income bracket suffer with GST,” Rafizi said.
The controversial GST Bill was passed last month in Dewan Rakyat, with no amendments, despite intense opposition, ensuring that the consumption tax starts at a flat rate of six per cent beginning April 1 next year.
The tax is among reforms introduced by Putrajaya to address its chronic budget deficit.