'Tax ultra-rich, not burden the poor,' ex-MP tells Treasury sec-gen

Former DAP MP Charles Santiago said the government should tax the ultra-rich instead of burdening the poor with additional levies.

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This came after Treasury secretary-general Johan Mahmood Merican acknowledged that Malaysia deliberately collects less tax than its regional peers to stay competitive.

The former Klang lawmaker pointed out that while the ultra-rich benefit from public amenities, such as roads, schools and others, they dodge taxes while demanding more incentives.

“We need to tax extreme wealth, introduce an inheritance tax and enforce an unexplained wealth order to reduce corruption and illicit flows like other countries.

“It is time they gave back and paid their fair share,” Charles (above) said in a statement today.

In an interview with Malaysiakini, Johan said Malaysia's tax-to-gross domestic product (GDP) ratio remains significantly below regional standards at just 12.5 percent, with only Indonesia collecting a lower proportion relative to economic output.

Treasury secretary-general Johan Mahmood Merican

“I think the broader issue, which maybe I should address, is that Malaysia still has a relatively low tax-to-GDP ratio.

“So, if you look at tax to GDP, both in 2023 and 2024, we only had about 12.5 percent of GDP.

“In this region, only Indonesia is lower, and that is also slightly lower than Malaysia,” he added.

Reform tax system

On that note, Charles said the nation’s tax system should be reformed and become progressive instead of burdening the poor.

He added that by giving a lot of leeway to the ultra-rich, the government ends up borrowing money repeatedly to manage the coffers.

“Why do we keep giving corporate tax holidays, ignore transfer pricing abuse and turn a blind eye to leakages and illicit financial flows?

“As a result, the government borrows - again and again. We borrow to plug a hole that the ultra-rich and corporations refuse to fill,” he added.

On June 9, Finance Minister II Amir Hamzah Azizan said the government would expand sales and services tax on July 1 to strengthen Malaysia’s fiscal position through higher revenue and a broader tax base.

He also said that a zero percent sales tax on necessities will be maintained, while non-essential goods will see a tax of between five and 10 percent. - Mkini