KUALA LUMPUR: A windfall tax on companies making extraordinary profits would send the wrong signal to investors and prevent them from investing in Malaysia, finance minister Tengku Zafrul Aziz said today.
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.”
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.
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.