Prosperity tax ‘fair’, says deputy minister after RM33bil wiped off market cap

KUALA LUMPUR: After RM33.8 billion was wiped off the market capitalisation on Bursa Malaysia following the government’s announcement of a one-off prosperity tax, deputy finance minister Yamani Hafez Musa said it could be a short-term reaction from market players.

Yamani admitted that the reduction of the market share could be a signal that players may be concerned over the tax, also known as Cukai Makmur, to be introduced next year.

However, he said, they may return as long-term players to buy shares available at lower prices.

Under the prosperity tax, announced in Budget 2022, earnings above the RM100 million mark will be taxed at a rate of 33% instead of the blanket 24% rate previously.

Yamani was replying to Nga Kor Ming (PH-Teluk Intan) in the Dewan Rakyat. Nga had asked about the market reaction to the announcement.

He said the 9% increase was reasonable as it was for companies that made profits for the past one or two years.

Yesterday, it was reported that a cumulative RM33.8 billion was wiped off the market capitalisation on Bursa Malaysia in a knee jerk reaction to the government’s announcement.

To an additional question by Ahmad Maslan (BN-Pontian) on the revenue to be earned from the prosperity tax, Yamani said it was not known yet but it could be more than RM3 billion.

Nga also raised concerns over financial mismanagement and leakages revealed in the Auditor-General’s Report, which caused the country to lose millions of ringgit. He asked what action was being taken against those responsible.

Yamani said the ministry would follow the recommendation proposed by the Public Accounts Committee. — Free Malaysia Today