Malaysia’s Corporate Tax projection for the next calendar year is unrealistic and seen as an attempt to mislead the rakyat with distorted figures.
The Member of Parliament (MP) for Batu Gajah, V. Sivakumar in a press statement yesterday questioned Finance Minister, Tengku Zafrul’s generous projection of RM64.6 billion for Malaysia’s Corporate Tax income for 2021. Amidst companies worldwide struggling to stay afloat during this scathing pandemic, the Perikatan Nasional (PN) government inexplicably projected that the Corporate Tax income for next year would be more than in 2019, before the pandemic hit.
V. Sivakumar commented,
“The spread of Covid-19 has caused the corporate sector to shrink in 2020. The sector faced multiple issues due to the Movement Control Order (MCO) and the shrinking of markets locally as well as globally. Furthermore, manpower constraints also affected operations in 2020.”
Due to the issues mentioned above, there was a stark decrease in income for the private sector during the past calendar year and with it, a noticeable drop in Corporate Tax income for our country.
As a matter of fact, the Corporate Tax collected in the year 2020 was around RM59.4 billion. In the previous year, the same tax collected around RM63.8 billion.
Therefore, the projection by Tengku Zafrul that Malaysia will rake in RM64.6 billion from Corporate Tax in 2021 is unrealistic and downright absurd. Sivakumar futher stressed,
“Our nation’s economy is yet to recover. The corporate sector is still adversely affected by the pandemic. Many businesses have closed. Therefore, the unrealistic projection by the Finance Minister is almost impossible to achieve.”
The Batu Gajah MP then questioned whether this unrealistic projection is nothing more than an attempt by the PN government to mislead the rakyat with ‘phantom’ figures. He iterated,
“Even if economic recovery is expected to happen next year, it could not possibly be at this projected rate. More so if Covid-19 continues to spread in 2021.”
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