Malaysia plans windfall tax for rich companies in new budget

Malaysia plans windfall tax for rich companies in new budget
Malaysia’s government has proposed record spending for 2022 to bolster post-pandemic economic recovery, with various industrial incentives and cash handouts for the poor and windfall taxes for high-income companies

Malaysia’s government on Friday proposed record spending for 2022 to bolster post-pandemic economic recovery, with various industrial incentives and cash handouts for the poor and windfall taxes for high-income companies.

Finance Minister Zaful Aziz put forward in Parlement the budget proposal of 332.1 billion ringgit ($80.2 milliard), à partir 320.6 billion ringgit ($77.4 million) cette année.

He said the virus lockdown in the third quarter has set back the economic recovery. Avec 95% of adults and more than 60% of teenagers fully vaccinated, he said the budget is designed to “strengthen economic recovery, build resilience and drive reforms.

The budget is the first under the administration of Prime Minister Ismail Sabri Yaakob, who took office in August after two changes of government since 2018 élections.

Ismail was the deputy prime minister under Muhyiddin Yassin, who resigned after less than 18 months following infighting in his coalition. Ismail’s appointment brought Muhyiddin’s alliance back to power.

It also returned the premiership to Ismail’s United Malays National Organization, which had led Malaysia since independence from Bretagne dans 1957 but was ousted in the 2018 elections amid a multibillion-dollar financial scandal.

Zafrul said Malaysia’s economy is expected to grow 5.5%-6.5% dans 2022, de 3%-4% projected this year after a contraction of 5.6% l'année dernière. Despite the increased spending, he said the government’s budget deficit is expected to narrow to 6% de 6.5% cette année.

With many livelihoods hit by the pandemic, he said the government will dish out a total 8.2 billion ringgit ($2 milliard) in cash handouts that will benefit 9.6 million poor households and individuals. Presque 5 billion ringgit has also been allocated to create 600,000 Nouveau travail, il a dit.

To boost state coffers, Zafrul said the government will impose a one-off special tax for high-income companies generating more than 100 million ringgit ($24.1 million) in profits. La première 100 million ringgit in taxable earnings will be taxed at 24% while the rest will be taxed at 33%, il a dit.

The budget in part is seen as an effort by Ismail and his UMNO party to win back public support, especially rural ethnic Malays, and to show that it can lead the country again. General elections are not due until 2023, but many expect polls could be called next year.

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