Impose windfall tax on glove makers, use money for small farmers, says MP

Impose windfall tax on glove makers, use money for small farmers, says MP

Abdul Azeez Abdul Rahim says the government should set up a special fund for the purpose.

The government says glove makers will not be subject to a windfall tax but there will be a prosperity tax for all companies earning more than RM100 million in profits. (Bloomberg pic)
KUALA LUMPUR:
An MP has urged the government to impose a windfall tax on giant rubber-based companies whose profits have mounted during the pandemic and use the money for a fund exclusively for small rubber farmers.

Abdul Azeez Abdul Rahim (BN-Baling) cited, for example, glove producers Top Glove and Hartalega, which had earned RM8 billion and RM2 billion, respectively, in 2020.

“A tax rate of 2.5% on the net profit of these two companies alone will provide an additional income amounting to RM256 million to the government,” he said during the debate on the Supply Bill 2022 in the Dewan Rakyat.

“The tax collected should be kept in a special fund for small rubber farmers. The government can pass an Act to ensure that this fund will not be used for other purposes.”

On Sept 30, finance minister Tengku Zafrul Aziz said the government did not intend to impose a windfall profit levy on glove makers or other businesses whose profits surged during the global health crisis.

However, he announced a one-off prosperity tax, also known as Cukai Makmur, when unveiling Budget 2022 allocations on Oct 29. Under the prosperity tax, earnings above the RM100 million mark of all companies will be taxed at a rate of 33% instead of the blanket 24% rate previously.

The announcement resulted in a knee-jerk reaction where RM33.8 billion was wiped off the market capitalisation on Bursa Malaysia yesterday.

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