'Tax the rich' rings hollow when many loopholes remain

Malaysiakini

18-06-2025

YOURSAY | 'Treasury risks ignoring mounting frustration over inequality by defending status quo.'
PM consistent on taxing the rich despite complaints: Treasury sec-gen
Elgato: While the Treasury secretary-general has defended Malaysia's progressive taxation framework, asserting that the wealthy are contributing their fair share, this stance fails to acknowledge several critical gaps in the current system.
First, the term 'progressive' taxation rings hollow when loopholes and exemptions disproportionately benefit the ultra-rich and large corporations.
Many high-income individuals and conglomerates continue to exploit tax planning strategies, including transfer pricing and offshore structures, to reduce their effective tax rates, sometimes even lower than middle-class wage earners.
Second, Malaysia's top personal income tax rate of 30 percent for those earning over RM2 million annually may appear progressive on paper, but it only affects a small fraction of the population.
The absence of a capital gains tax (beyond real property gains), inheritance tax, or meaningful wealth tax means that passive and inherited wealth remains largely untouched.
This skews the tax burden toward wage earners and consumption taxes like the SST, which are inherently regressive and disproportionately affect the lower- and middle-income groups.
Furthermore, the government's reliance on indirect taxation through SST, rather than a more comprehensive and equitable goods and services tax (GST) with robust rebate mechanisms for the poor, raises questions about the overall fairness and efficiency of the tax regime.
In defending the status quo, the Treasury risks ignoring mounting public frustration over inequality and the perception that the tax system favours the elite.
A truly progressive tax policy would require not just higher nominal rates for the rich, but a more holistic overhaul to ensure that wealth, not just income, is taxed, and that all Malaysians contribute equitably to national development.
KKVoter: Can you please explain, then, why the LVG (low-value goods) tax was implemented immediately while the luxury goods tax, meant to target those who can afford it, is delayed for two years?
The only tax aimed directly at the wealthy is held back, while the one targeting low-value goods kicks in right away.
Prime Minister Anwar Ibrahim's so-called war against the 'maha kaya' (ultra-rich) and 'elitists' seems to be hitting the middle class and urban poor instead.
To this day, we've seen no reclassification of who qualifies as 'maha kaya' after he initially claimed it referred to those earning a combined income of RM100,000 per month.
When public ridicule peaked, he suddenly shifted the narrative to 'what's wrong with taxing those who earn RM100,000 per month' - a move straight out of his avocado playbook.
The story changes, but the tax stays the same. And he similarly attacks those who don't buy the story as 'elitists' or 'liberals'.
And just like the PMO staffer who was 'interviewed' over three days by Malaysiakini to justify Nurul Izzah Anwar's appointment and those non-existent reforms, now we have another one stepping in to defend the PM - this time by calling the most inconsistent PM in history... consistent.
That one takes the cake.
Esviel: There is consensus that the wealthy contribute more to the nation's coffers, and I don't think anyone is complaining violently.
The problem is that the PM is making it sound like they are bloodsuckers and must be punished. The messaging is quite often distorted and highly combative. This is the wrong strategy.
The wealthy are wealthy for a reason: they are generally smart, competent, intelligent, and have a growth mindset.
They will fight fire with fire when you rile them up. Take a combative stance and see if they will oblige. Many will find ways to mitigate the additional taxes in ways you cannot easily understand or address.
Treasury secretary-general Johan Mahmood Merican, you must be smart to be in the position you are in.
However, lately, you have been trying to defend some of the policies with infantile logic. I hope that you will stop this and give us some decent arguments. Use ChatGPT if you must.
Coward: I think the T10 or T20 don't mind contributing more to the government coffers, they just object that the prime minister has put them out as the straw man whenever his tax or subsidy policies hit resistance.
That's uncalled for, and the PM is dividing our society in new ways on top of existing divisions.
Can't the prime minister have an adult conversation about these issues? Tell people why they must take the pain of reduced petrol subsidies, for example.
Don't promise them the impossible, that they won't be affected as he will only target the high-income group.
It's fair that the high-income group takes a heavier burden on the increase. It's also fair that the very low B40 group get support from the money the high-income group contributes.
However, it is unfair that only the high-income group pays. The middle-income group just takes their fair share of responsibility.
That's what the prime minister should say, just like the now viral speech his Singapore counterpart said when Donald Trump announced his liberation day tariff.
Have a proper conversation, treating everyone as an adult. Don't start distorting reality.
World Citizen: We agree you want to tax the rich more - progressive taxation. So why then impose the sales tax on imported fruits like apples, oranges, pears and bananas?
These items are consumed by the middle class and lower-income groups. I believe you have confused this with the government's objective of encouraging the consumption of local fruits.
In that case, find ways to increase the production of local fruits by getting state governments to allocate more land, especially for fruit production, and many other ways of incentivising local fruit production.
Fund more research and development into better methods of fruit cultivation and improving the quality of local fruits. Find better methods of distribution, as fruits are a highly perishable commodity.
Food security is very important, and that includes keeping prices low.
A healthy population is essential for national development and to avoid spending money on many things, like healthcare.
The government should get this priority right. Always.
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