KUALA LUMPUR: A windfal tax will be a shot in the foot at a time when the economy badly needs a shot in the arm, said UHY Malaysia's executive director of tax compliance and advisory Karen Lee.
Lee said although there were growing calls worldwide to support a windfall tax, the regime itself was regressive and would hurt the working population in the long run.
"Windfall tax raises cost to consumers and prevents new entrants to the market place which in turn cuts into job creation opportunities. This tax is narrow, arbitrary and extremely opaque.
"It has no place in the 21st century. Government should be in the business of encouraging innovation, modernisation and profitability in the private sector," she added.
Lee, however, said should Malaysia want to impose a new form of tax, it must be one that will encourage companies to hire Malaysians rather than foreign workers.
"It must be Malaysia first, if we are to get out from this crisis triggered by Covid-19. To do this, we must also relook into the minimum wage regime. We cannot afford to have a minimum wage policy as such a policy actually goes against the supply and demand norm which is the cornerstone of the modern economy," Lee said.
The government had increased the minimum wage for major towns under 56 city and municipality councils. This The came into force on February 1 this year.
The minimum wage is now RM1,200 (about US$283) per month, an increase of RM100 from 2019.
The rate for employees earning an hourly rate has been increased to RM5.77 from RM5.29.
Lee is a member of the Association of Chartered Certified Accountants, as well as being an expert in tax compliance matters.
UHY, meanwhile, was established in 1986 and based in London.
It is a network of independent accounting and consulting firms with offices in nearly 296 major business centres in 89 countries.