Raise corporate tax rates, PSM chief tells Asean members

 

Parti Sosialis Malaysia chairman Dr Michael Jeyakumar Devaraj says increasing corporate tax rates to 30% within 10 years will see Asean members enjoying a bigger revenue.

KUALA LUMPUR: Parti Sosialis Malaysia chairman Dr Michael Jeyakumar Devaraj has proposed that Asean countries agree on gradually increasing their respective corporate tax rates instead of reducing them.

He said this could see the 10 member nations earn a bigger revenue.

The corporate tax rate in Malaysia currently stands at 24%.

Jeyakumar said Malaysia was in a “race” to reduce its corporate tax imposed on profits made by companies, and other Asean countries were doing so in a bid to attract foreign investors.

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Dr Michael Jeyakumar Devaraj.

He said there was a need to put a stop to reducing the tax rates, which would see other countries doing so to remain competitive.

“So there needs to be an FTA (free trade agreement) among the 10 nations to increase the tax so the rates would reach 30% in 10 years.

“If we can agree to this, Asean nations can earn a bigger revenue,” he said at a forum here last night.

Jeyakumar said such an agreement would also not put any country at a comparative disadvantage, and would help aggregate demand.

“There are a lot of benefits to this (initiative),” he said.

He suggested a tariff on imports from Asean countries that failed to increase their corporate tax rates, as specified in the proposed agreement.

Separately, Jeyakumar proposed for the government to borrow bonds with a low interest rate.

Instead of selling the bonds to private investors, he said, the government should sell them to the central bank.

“This is called debt monetisation,” he said, adding that the practice, which is also referred to as monetary financing, would see a government borrow money from the central bank to finance public spending instead of selling bonds to private firms or raising taxes.

“Many countries do this,” he said. - FMT