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KUALA LUMPUR: Implementing a windfall tax on glove companies that have benefited from the pandemic is an inconsistent policy that will send the wrong signal to investors and keep them from investing in the country, said the minister of Finance, Tengku Datuk Seri Zafrul. Abdul Aziz.
He said that if windfall tax were applied, investors would think twice before investing in the country, or even choose to invest in neighboring countries like Vietnam and Singapore, which do not impose such taxes.
“You can (impose that tax), but it could send the wrong signal, especially for an open economy like Malaysia,” he told Bernama after appearing as a guest on Bernama TV’s “Ruang Bicara” program titled “Budget 2021 the victory of Rakyat “. here on saturday night.
Tengku Zafrul said that policies should be long-term and not based on short-term gains.
Former Youth and Sports Minister Syed Saddiq Abdul Rahman has been urging the government to impose a windfall tax on glove makers who he claimed had made huge profits amid the COVID-19 pandemic.
Meanwhile, Tengku Zafrul expressed optimism that Malaysia’s gross domestic product (GDP) in 2021 will grow within the range of 6.5% to 7.5% as projected by the government.
He said that the 2021 GDP forecast is based on various assumptions, such as the rebound in economic demand, as well as the COVID-19 vaccine expected to be available in the first quarter of 2021 (Q1 2021), which would have an effect positive spillover in Malaysia.
“I am optimistic that the GDP for 2021 will be within the range of 6.5% to 7.5%, and I am not alone, this is not my projection, but the projection of the Ministry of Finance and Bank Negara Malaysia” .
“And our forecast is in line with those made by the International Monetary Fund, the World Bank, the Asian Development Bank and other rating agencies, which is within the range of six to eight percent,” he said.
To achieve the growth target next year, Tengku Zafrul pointed out that the most important thing is to execute the policies well.
Regarding the GDP projection for the fourth quarter of 2020, Tengku Zafrul, however, admitted that there will be an adverse impact, especially in the retail and tourism sectors after the reinstatement of the Conditional Movement Control Order (CMCO) in Kuala Lumpur and Selangor, including the Klang Valley. since mid-October.
The two states, according to the finance minister, contributed about 40 percent of the country’s total GDP.
“But it won’t (be) as bad as the Motion Control Order (MCO) in March, where the daily impact cost around RM2.0 billion to RM2.4 billion per day, while during CMCO, the impact daily is RM300 million as economic activities, manufacturing and exports continue to function as usual, ”he said.
The country’s economy contracted 17.1 percent in the second quarter as it took the brunt of the MCO, but improved to -2.7 percent in the third quarter of 2020 when companies reopened in batches. .
The country’s economy is expected to contract 4.5% in 2020.
– CALL
TAGS: Tengku Zaful, Named TV, Talk Room, windfall tax, GDP
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