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Less Than 250 Companies In Malaysia Meet The Conditions Of Prosperity Tax
2021-11-11

There are no more than 250 companies in Malaysia that meet the conditions of prosperity tax collection. Finance Minister Zavru guarantees that prosperity tax will be collected only once, with the first 100 million ringgit profits collected at 24% and the remaining tax rate at 33%. It is expected that 10 billion ringgit will be collected

Malaysian Finance Minister Zavru has promised that the prosperity tax will be a one-time tax levied by the government in an extraordinary period, and no more than 250 companies meet the conditions of prosperity tax collection, and many companies have indicated that the one-time tax will not affect the company's dividend payment.

He pointed out at the dialogue meeting of investing in Malaysia yesterday that Guoneng Company, Malaysia Telecom Company, and telecom company AXIATA also support the implementation of prosperity tax, and top glove companies (top gloves) have expressed their willingness to contribute to this one-time tax.

Once the economy recovers, we will consider re-implementing consumption tax or new tax.

Zavru announced earlier when presenting a new budget in the lower house of parliament that the government would levy a prosperity tax on high-income companies, with the first 100 million ringgit profit of 24% and the remaining tax rate of 33%. According to the records of the Ministry of Finance, the national treasury is expected to get up to RM 10 billion (about S .23 billion) in taxes from the above companies.

In view of the industry's doubts about whether the prosperity tax should be levied at one time, he said that once the economy recovers, the government will consider re-implementing the consumption tax (goods and services tax) or implementing the new tax, but it is imperative to maintain the stability and sustainable recovery of the national economy.

He said that the government's medium-term measures are to reduce the dependence on direct taxes and expand the income base by turning to consumption tax, which includes consumption tax and value-added tax.

He said that Malaysia needs to continue to obtain new tax sources, such as digital economy tax, and the new taxes mentioned in the 2022 financial case include taxes on sugar, e-cigarettes, and imported products. At the same time, in line with the vision of carbon neutrality, the Ministry of Finance is also discussing with the Ministry of Environment and Water Affairs the implementation of a carbon tax.

He also said that with the recovery from the crown disease epidemic, countries around the world have decided to increase taxes in the near future. Therefore, the government's cancellation of tax exemption for foreign sources of income in the new financial case should not be regarded as a negative measure to prevent foreign direct investment, because it helps to prevent any tax evasion and avoidance.

Mustafa, Minister of the Prime Minister's Office in charge of economic affairs, said in a TV interview the night before last that Malaysia's economy is expected to recover only when cross-border activities are fully resumed.

He said that once the border is fully opened, tourism and investment areas under the attack of crown disease will be revived. Malaysia's economy often depends on external factors, such as foreign tourists, exports, and foreign investment. Therefore, if the economy is to recover, it must wait until cross-border activities are fully restored.

International tourists can enter Malaysia after staying in Singapore for 14 days.

On the other hand, Minister of Tourism, Arts and Culture Nancy Sukley said that through the implementation of the Vaccinator Tourism Corridor (VTL) between Malaysia and Singapore on the 29th of this month, international travelers can enter Malaysia as long as they stay in Singapore for 14 days.

Malaysia will make similar arrangements with Thailand, Indonesia, Brunei, and Cambodia. Prime Minister Ismail Shabiri also flew to Indonesia for a visit yesterday. VTL will be one of the topics to be discussed.

Nancy said that the authorities will comply with the implementation of VTL, seize the opportunity to adjust the standard operating procedures of the Tourism Bubble Program in Fuluojiaoyi Island to complement each other.

She pointed out that the Frodo Jiaoyi Tourism Bubble Plan, which was originally scheduled to be open to international tourists on November 15th, was a pioneering plan, and later the cooperation of Ma Xin VTL appeared, with the proviso that visitors must stay in Singapore for 14 days before they can enter Johor.

Nuoxishan, director of health, said that after more than 4,000 confirmed cases of Malaysia's crown disease were added for four consecutive days, it rose to over 5,000 yesterday, reaching 5,403 cases, of which 5,378 cases were local infections and 25 cases were imported from abroad.

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