Where is fairness, economist asks over measly non-Bumi budget allocation
PETALING JAYA: A prominent economist has questioned the lack of fairness in Budget 2022, citing the massive disparity in allocations between the Bumiputera and non-Bumiputera communities.
Muhammed Abdul Khalid, who was once former prime minister Dr Mahathir Mohamad’s economic adviser, said the RM11.4 billion allocation for the Bumiputera community dwarfed that of the Chinese and Indian communities put together, which came to about RM345 million.
“That is only around 3% of what the Bumiputera community received.
“What is important to me, as a Muslim, is the concept of fairness. Where is the fairness?
“It’s true there are many rich Chinese, but there are also many who are poor. Are we being fair?” he said on a talk show titled “Bajet 2022: Mampukah Rawat Ekonomi Melayu” organised by Dewan Perniagaan Melayu Malaysia last night.
Khalid also said that the Budget 2022 allocation for the Bumiputera community brings the total allocation over the past three budgets to some RM30 billion.
“But what is the outcome? We do not know. Which Bumiputera have been helped?”
Previously, former minister Zaid Ibrahim remarked that it was “nice” to be a Bumiputera as billions were set aside for the community.
“This must be the only country in the world where the Budget is race-specific,” he said in a tweet after the tabling of the budget on Oct 29.
Khalid also took aim at the one-off prosperity tax. Under Cukai Makmur, as it is called, corporate earnings above RM100 million will be taxed at a rate of 33% instead of the previous 24%.
Reaction to the tax was swift on Bursa Malaysia. The total market capitalisation of listed companies dropped by RM33.8 billion, and deputy finance minister Yamani Hafez Musa admitted on Tuesday that this could have been due to concerns over the tax.
“We never heard (of this tax). Suddenly (the tax) is raised to 33%. For the sake of earning some RM3 billion in tax revenue, we saw our market capitalisation drop by RM33 billion,” Khalid said, adding that the drop in market capitalisation also affected government-linked companies (GLCs).
“The whole idea was to tax superprofits by collecting from glove manufacturers who are making four to five times what they did before (Covid-19) but instead you target all companies.”
He said the biggest issue with the tax was that it was a sudden shift in policy and this undermined market confidence. He said policy transparency and consistency was important.
“The market will tolerate some form of taxation but not like this. The concept is fair taxation,” he said. - FMT
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