Tax Reforms: Raising the Corporate Income Tax Rate for Large Corporations

Proposing a Solution

Pasir Gudang MP Hassan Karim recently proposed that the government raise the corporate income tax rate on large corporations from 24% to 27%. In a Dewan Rakyat debate, Hassan Karim argued that this increase would help generate more government revenue, which could be distributed to Malaysians. He emphasized the importance of tax collection for the country’s coffers, but also cautioned against imposing additional taxes on the rakyat.

Current Tax Rates

Currently, companies with paid-up capital of RM2.5 million and below, as well as less than RM50 million in income, are taxed 15% on the first RM150,000 they make. This rate increases to 17% for income between RM150,001 and RM600,000, and 24% for income above RM600,001. For companies with paid-up capital above RM2.5 million or income above RM50 million, the tax rate is fixed at 24%.

Economists’ Concerns

While some have called for an increase in the corporate income tax rate, economists have warned that such a move could deter investments and economic growth. This is because higher taxes can lead to reduced competitiveness and profitability for businesses, potentially causing them to invest elsewhere.

Alternative Solutions

Rather than imposing additional taxes on the rakyat, Hassan Karim suggested raising the corporate income tax rate for large corporations. This approach aims to lighten the load of the rakyat, rather than adding to it. By increasing the tax burden on large corporations, the government can generate more revenue without relying on individual taxpayers.

Conclusion

Raising the corporate income tax rate on large corporations is a proposed solution to address the government’s revenue concerns. While some economists may have reservations about this approach, Hassan Karim’s suggestion highlights the importance of finding a balance between generating revenue and alleviating the tax burden on individuals. As the government considers tax reforms, it is crucial to weigh the pros and cons of different approaches to ensure that the best solution is implemented for the benefit of all Malaysians.

FAQs

Q: What is the current corporate income tax rate for large corporations?
A: The current corporate income tax rate is 24%.

Q: What is Hassan Karim’s proposed solution to increase government revenue?
A: Hassan Karim proposes raising the corporate income tax rate on large corporations from 24% to 27%.

Q: What are the concerns about raising the corporate income tax rate?
A: Economists have warned that such a move could deter investments and economic growth, as higher taxes can lead to reduced competitiveness and profitability for businesses.

Q: Why is it important to consider the tax burden on individuals?
A: It is important to consider the tax burden on individuals to ensure that the government’s revenue-generating measures do not unfairly burden taxpayers.