Pua questions how govt can raise revenue with income tax cut

 

Damansara MP Tony Pua is puzzled as to how Putrajaya could achieve, as stated in Budget 2021, an 18 percent hike in personal income tax revenue after reducing income tax by one percent for those earning between RM50,001 and RM70,000 annually.

"The government is expecting to increase its revenue to RM172 billion in 2021 from RM153 billion in 2020. That's fine (with me).

"But what shocked me is a significant chunk of the projected increase in revenue is coming from personal income tax, which is from RM35.9 billion to RM42.4 billion (in 2021), which is an increase of 18 percent," he said.

Pua, who is DAP's national publicity secretary, was speaking in an interview with KiniTV earlier today.

He said he was not sure how the government could announce a personal income tax reduction of one percent for one tax bracket but at the same time increase its projected income tax revenue by 18 percent.

He added that he will raise his concerns during the budget debate which will be held in later days.

The tax relief was part of the initiatives by the government to lighten the burden of Malaysians amid the Covid-19 pandemic.

Pua also questioned how the business community will cope as the government eyes to increase its corporate tax collection to RM64.5 billion next year from RM59 billion in 2020.

"For the companies, (tax revenues are projected to) go up as well. Not sure if companies (are able to) pay next year with the (current) business environment," he said.

He also noted that only parts of the proposals brought up by Pakatan Harapan were incorporated into Budget 2021, particularly relating to the RM1,000 monthly welfare aid and safety nets.

On Nov 1, Harapan lawmakers and leaders met Finance Minister Tengku Zafrul Abdul Aziz (photo) for talks on the budget in which the opposition brought up six proposals.

That meeting was held after the Yang di-Pertuan Agong advised MPs from both sides to support Budget 2021 and ensure that it passes without hindrance.

Previously, there was speculation that the budget might be voted down in Parliament as a show of no-confidence against Prime Minister Muhyiddin Yassin.

Pua still expressed hope that the Perikatan Nasional government could further adopt the proposals of the opposition during the budget debate at the Dewan Rakyat next week.

"As had been decided by the leadership of DAP and Harapan, we will debate the policies. We will raise the improvements (needed and if they) are happy to collaborate with us, then perhaps that calls for us to support the budget," he said.

He said Harapan may abstain from voting if none of its proposals were accepted by the ruling coalition. - FMT