He described the tax as being a non-consistent policy which might result in investors deciding to opt for neighbouring countries such as Vietnam and Singapore which do not impose such taxes.

“Name me one country in this region that has imposed a windfall tax,” he said today in a television interview. “You can (impose such tax), but you might send the wrong signal, especially for an open economy like Malaysia’s.”

Tengku Zafrul said policies have to be made for the long-term and not based on short-term gains.

Former youth and sports minister Syed Saddiq Abdul Rahman has been among those who have urged the government to impose a windfall tax on glove makers who, he said, had made huge profits amid the Covid-19 pandemic.

Tengku Zafrul expressed optimism that Malaysia’s 2021 gross domestic product would grow between 6.5% and 7.5% as projected by the government.

He said among the assumptions for the forecast was the pick-up in economic demand, and the prospect of a Covid-19 vaccine being available in the first quarter of 2021.

“This is not my projection, but the projection of the finance ministry and Bank Negara Malaysia,” he said. “Our forecast is in line with those made by the International Monetary Fund, World Bank, Asian Development Bank and other rating agencies, which fall within the range of 6% to 8%,” he said.

Incentives for high technology

The government will ensure that Malaysia continues to be a choice destination for foreign and domestic investors, Tengku Zafrul said.

He said the government had allocated RM1 billion in incentives for high value-added technology. “This fund aims to support research and development investment in aerospace as well as electronic clusters such as the industrial parks in Batu Kawan, Penang, and Kulim, Kedah.”

As automation and digitalisation were needed to push the country’s economy forward, a High Technology Fund of RM500 million provided by Bank Negara had been set up to support high technology and innovative companies.