Windfall tax a must during pandemic, says Dr M

 

The panellists cited glove manufacturers, such as Top Glove, which have made record profits in the past year to justify why a windfall tax was necessary. (Reuters pic)

PETALING JAYA: The government must introduce a windfall tax for corporations profiting from the pandemic, a forum was told today.

Among the panellists at the RESET Malaysia forum on the economy was former prime minister Dr Mahathir Mohamed who said a windfall tax of about 30% on profitable businesses could potentially help the government during this time.

“It may help the government because during a pandemic we need to spend a lot of money,” he said, adding that the government’s tax revenue had been severely affected by the weaker economic activity during the pandemic.

Mahathir said the pandemic brought different impacts on individuals’ and companies’ economic situations, with some, like glove manufacturers and banks, making huge profits during this time.

“We should think about how to balance these effects so that those making large profits can assist the government in its efforts to help the other groups who are negatively affected.”

Meanwhile, economist Jomo Kwame Sundaram said there was no reason to delay the introduction of a windfall tax.

However, in the long term he suggested a direct tax on wealth, aside from the introduction of a more progressive tax system.

Meanwhile, he observed that much of Malaysia’s pandemic strategies were borrowed from Western countries, instead of learning from the experiences of East Asian countries like China, Taiwan, Laos and Cambodia that had never implemented widespread lockdowns.

Giving an example of South Korea, he said the government had implemented a comprehensive, whole-government plan involving all ministries to deal with the pandemic.

Another economist, Nungsari Ahmad Radhi, said Putrajaya failed to utilise government instruments to protect businesses or people from any unfair practices during the pandemic.

“There should be legal instruments introduced to protect business owners, but there was a state of emergency and Parliament was suspended, so new laws could not be passed.”

He too mooted the introduction of a windfall tax on billion-dollar businesses such as glove manufacturers.

The world’s biggest glove manufacturer Top Glove recorded a net profit of RM2.87 billion in its second-quarter for the financial year 2021, which was the highest quarterly result in Malaysian corporate history.

The group also reported its highest-ever quarterly sales revenue of RM5.37 billion. - FMT