15 Sep - 3 min read
Former prime minister Datuk Seri Najib Razak has suggested the implementation of a temporary recovery tax plan to help Malaysia’s economy recover from the onslaught of the Covid-19 pandemic and the subsequent lengthy movement control order (MCO) period. The tax plan will target the affluent group within the country.
“I propose a temporary Covid-19 recovery tax package for two years. This, for example, will include a windfall tax, luxury condominiums development tax, stamp duty on transactions, inheritance tax, stock market trading tax, and higher personal income tax on high-income individuals. After two years, we can end this tax,” said Najib, who is also the Member of Parliament for Pekan.
Najib further proposed for the government to impose a direct tax on the profits derived by tech giants that have a presence within the country, such as Amazon, Google, Facebook, Netflix, and YouTube. The minister argued that many countries – including Australia and Indonesia – are already doing this, and that Malaysia should emulate them.
“These companies reaped profits, but have never been taxed by our country. This (imposed) tax is on their profits, not for the usage by the customers,” said Najib.
Najib also commented that there is a need for the government to create a more dynamic and appealing environment for the stock market. In line with this, he suggested that the government should once again suspend regulated short selling and script borrowing or lending for at least six months in a bid to stabilise the stock market, as well as protect retail investors.
For context, the Securities Commission Malaysia (SC) and Bursa Malaysia had announced at the end of 2020 that they will uplift the temporary suspension of regulated short selling following heightened market volatility due to the pandemic. The move – which permitted regulated short selling starting from 1 January 2021 – was intended to facilitate investors’ risk management and to revive securities borrowing and lending (SBL) activities.
These proposals by Najib were only a few of the many suggestions that were made. Among others, the minister had also put forward the idea of a new i-Survive loan scheme with a three-year repayment period and a maximum interest rate of 3% for B40 and M40 income groups, as well as the expansion of i-Citra to increase the maximum withdrawal amount from RM5,000 to RM10,000. He also mooted the admission of more international cryptocurrency trading platforms into Malaysia.
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