PSM deputy chief S Arutchelvam said while the idea of negative income tax or tax credits for the needy was interesting, tax evaders could exploit it.

Arutchelvam was responding to analyst Geoffrey Williams’s call for the introduction of UBI and negative income taxes instead of outright wage subsidies for SMEs.

In a statement, he said the government had somewhat already carried out UBI by providing direct cash assistance to the needy through BR1M and the Bantuan Prihatin Nasional (BPN).

“While the government is familiar with bailouts or incentives to large companies in trouble, why not provide incentives directly to the worker to enjoy minimum wage or UBI?

“The priority should be to help the poorest and not the richest.

“Therefore, the proposed wage subsidy to SMEs should go directly to the staff, and not the owners of the companies.”

Arutchelvam also agreed with Williams’ call to not give a blanket wage subsidy to all SMEs when some of these outfits could be incompetent or “zombie” companies.

On March 19, the government announced that the minimum wage would be raised to RM1,500 per month from May 1.

The government has provided some leeway by deferring the implementation date for some economic sectors, like the tourism industry, which was badly affected by the Covid-19 pandemic.