Malay Economic Council supports inheritance tax, capital gains tax

Malay Economic Council CEO Ahmad Yazid Othman. (Facebook pic)

KUALA LUMPUR: The Malay Economic Council (MTEM) hopes the government will introduce taxes on inheritance, wealth, capital gains and carbon.

MTEM CEO Ahmad Yazid Othman said these taxes not only serve to contribute to national revenue but would also drive national spending and investments.

“Inheritance tax is something to be introduced for the wealthy.

“If the inheritance is kept in banks, it does not bring any benefit to the country and, therefore, it should be taxed,” he told reporters at a briefing on the third quarter (Q3) 2018 economic conference here today.

He said a wealth tax would be based on an individual’s wealth and the tax would motivate them to spend towards the country’s development.

“Capital gains tax is a tax on the profit derived from an individual’s or company’s investment which is currently tax-free,” Yazid said.

He agreed with the views expressed by economist Prof Joseph Stiglitz at the recent Khazanah Megatrends Forum 2018 that the introduction of a carbon tax would be an incentive to help reduce carbon emissions.

“Taxation is not a direct way to obtain funds because it gives positive effects where the rich will invest in the country. This has been proven effective in several countries,” he said.

Yazid said that data from a survey conducted by MTEM and Kajidata Research Sdn Bhd on economic confidence in Q3 showed an overall confidence score of 36.6, which falls in the weak category.

“The score was slightly lower compared with Q2’s 39.3,” he said.

The survey revealed that Bumiputeras experienced the greatest loss of economic confidence with a reduction of 3.4 points to 37.3 points (Q2: 40.7), followed by Indians with a 2.0-point loss to 39.8 (Q2: 41.8) and Chinese with a 1.4-point loss to 34.2 (Q2: 35.6).

Yazid said he was optimistic that confidence in the economy would return in Q4 as there are unlikely to be any sudden changes.

MTEM is a national-level umbrella organisation representing more than 50 Malay economic NGOs.