While everyone is suffering from the higher fuel prices, we have some of the richest bankers in Malaysia saying they should be shielded from the impact and not share the pain. Read Here. Do you have any sympathy for them?
The Malaysian government’s policies have been very favourable towards corporates. They get all sorts of tax exemption. In fact the highest tax rate for individuals is 2% higher than corporation tax. The rich in Malaysia can avoid paying income tax by setting up companies and get all sorts of tax incentive, exemptions. Why, even capital gains on their shares are not taxed. So if they do some tax planning, they can avoid paying tax altogether - just don’t declare any dividends but let the net assets increase.
With the increase in fuel prices, the average Malaysian is feeling the pinch. The rich, however, don’t feel the full tax impact, as they have a tax shield - they get tax deduction of 26% for every Ringgit they spend. In fact, some lucky individuals have fuel cards, which immunise them from the impact totally (the tax on the fuel benefit is so negligible it’s a joke).
So I can’t believe that these people are now whining that they have to share in the pain. All the reasons given as to why the windfall tax should not be imposed are for the benefit of the rich.
I really hope that the government will not succumb to pressure and reverse their decision. Of course windfall tax should not be used at the whim and fancy of the ruling government to fill up their coffer, but these are difficult times and difficult actions have to be taken. I would go further and say that the windfall tax should be imposed on the oil companies and palm oil companies as well.