KUALA LUMPUR: It may be time for Malaysia to implement the inheritance tax, which can be a valuable source of tax revenue, says Kuala Selangor member of parliament Datuk Seri Dr Dzulkefly Ahmad.
He said the inheritance tax could act as a proper redistributive justice and Malaysia could take a page from the Organisation for Economic Cooperation and Development (OECD) countries that had implemented it.
OECD is an international organisation that works to build better policies for the people.
"For example in South Korea, the heir to the Samsung company who inherited his father's wealth was asked to pay the inheritance tax of US$6 billion.
"It is even said so in Islam that in every wealth there are other people's rights, such as the asnaf's entitlement to zakat," he said when debating on the 2024 Budget.
He was touching on the capital gains tax that was announced by Prime Minister Datuk Seri Anwar Ibrahim during the 2024 Budget tabling, saying that the Inheritance Tax could be another option for Malaysia's income.
On Oct 13, Anwar said the government would enforce the implementation of Capital Gains Tax for the disposal of unlisted shares by local companies based on net gains at a rate of 10 per cent starting March 1.
This, however, was not well-received by Small and Medium Enterprises (SMEs) as they expressed their disappointment that the introduction was without any consultation with SME stakeholders.
"If we must introduce a wealth tax to avoid the politically difficult decision to bring back the goods and services tax (GST), we should be introducing an inheritance tax or windfall tax instead of a blanket capital gain tax, which would hurt SMEs disproportionately," says Small and Medium Enterprises Association of Malaysia (Samenta) national president Datuk William Ng.
Dzulkefly also described the country's income tax as not being progressive due to the fact that the "top tiers" are not taxed accordingly as compared to the "lower tiers".