KUALA LUMPUR: Windfall tax should be re-introduced immediately to increase government revenue and to fight the spread of the Covid-19 virus, former prime minister Tun Dr Mahathir Mohamad said.
The Langkawi member of parliament pointed out that certain entities such as rubber glove manufacturers and financial institutions are making extraordinary profits during the pandemic but are still paying the same amount of tax which is 26 per cent.
"During an emergency such as the one we are in now means the government must have plenty of money to spend because we need to help the poor by providing them with sources of income and food. We need money for this.
"If we follow the normal taxation system, during a time when economic activities have been greatly reduced, then the government will get less tax.
"We need to rebalance the effects of this pandemic so companies that make big profits (during a pandemic) will help efforts to assist those who are badly affected.
"Windfall tax can be introduced. This is not unusual," he said during an online forum aired live on Reset Malaysia Facebook page.
Renowned economist Prof Dr Jomo Kwame Sundaram echoed a similar view, saying windfall tax was the only way to help the government increase its revenue.
Both Dr Mahathir and Jomo also said that reintroducing goods and services tax (GST) during the pandemic would be a bad idea.
Dr Mahathir said GST will not resolve any problem in totality as the government will not be able to collect taxes since businesses are not allowed to operate during the current Movement Control Order (MCO).
Jomo was of the opinion that direct taxes should be increased to improve the country's revenue collection system.
"We collect more indirect taxes and less direct taxes. GST is just one way to rationalize the tax system and does not bring huge benefits (at the moment) because business cannot be conducted (in full) at the moment.
"For the long term we need direct taxes and what is important for the short term is windfall tax and there is no basis to defer any further," Jomo said.