PARTI Sosialis Malaysia (PSM) criticised DAP secretary general Lim Guan Eng for being opposed to any moves to introduce the Capital Gains Tax.
“Lim said that his party will oppose any moves from Putrajaya to introduce Capital Gains Tax on the wealthy.
“But in the same breath, he is telling the Government to help the people who are suffering due to the economic downturn. What does Lim really want?” its deputy chairperson S Arutchelvan told FocusM.
Two days ago, Free Malaysia Today reported Lim as saying that the DAP would oppose any move by the Government to introduce Capital Gains tax, which includes Inheritance Tax, in its bid to raise revenue.
He said that such taxes would make Malaysia less competitive in the global economy and become a burden on those already suffering from the effects of the pandemic.
“This proposal on capital gains tax and inheritance tax was mooted by Pakatan Harapan when I was the finance minister.
“But I rejected them as it will make Malaysia less competitive, especially as we have one of the highest corporate tax rates among the 60 biggest economies of the world,” the Bagan MP was reported saying.
Elaborating on the tax regime, Arutchelvan said the levy is imposed on capitals gains and profits made from the sale of assets and stocks.
He added that Capital Gains Tax is only imposed when the asset is converted into cash, not when it is still being held by investors.
“Capitals Gains Tax is imposed when the individual decides to sell his assets or shares higher than the purchase rate and takes effect only when there is realised gains.
“In essence, the tax regime does not prevent people from becoming rich but only taxes the rich who wishes to become wealthier.
“Therefore, it’s natural for stockbrokers and those with high capital to oppose the Capital Gains Tax as it would reduce their profit margins,” Arutchelvan mentioned.
Better tax regime than GST
The PSM leader said that majority of the working-class Malaysians would not mind having Capital Gains Tax as it would only affect the rich and those with high net worth.
He added that the middle-income citizens and small and medium enterprises (SME) would also not be affected by the tax regime.
“Besides, buying and selling shares involves skills in speculative trading. It does not involve manual work like what most Malaysians endure,” Arutchelvan noted.
He also stated that the Capital Gains Tax was better than reintroducing the Goods and Services Tax (GST), as the latter would burn a hole in everyone’s pockets irrespective of income level.
“Besides, those who get levied under the Capital Gains Tax need little assistance for the Government unlike working class Malaysians. These people have huge financial reserves.
“And the tax regime would help narrow the gap between the rich and poor, while filling up the Government’s coffers so that Putrajaya can come up with more programmes to help the needy.
“In my view, Capitals Gains Tax is the way to go and I believe DAP Youth, which upholds social democracy, will understand what I’m saying,” Arutchelvan quipped.
Hurling brickbats against Lim, the PSM veteran said the former received criticism from many quarters for his austerity measures which affected the needy during Pakatan Harapan’s administration.
“One of the criticisms levelled against Pakatan then was they reduced funds meant to help small time farmers, fishermen and pre-school teachers.
“Though I understand that they wanted to curb excessive spending and corruption, I don’t understand why the lower income people were the ones bearing the brunt of it.
“As for the Capital Gains Tax, many progressive economists deem it fair but I guess Lim just want to protect the elite group,” he remarked. – Oct 4, 2021.
