Race-based Income Tax System Unthinkable?
If you’ve read this week’s edition of the Edge, you might have come across an interesting Citicorp report on the sleepy state of the Malaysian economy and the lacklustre performance of its stock exchange.One of the recommendations by the analyst caught my attention (“Regaining Investor Confidence”, page 64): that a race-based income tax system would be an even more efficient substitute to the current market-intrusive equity ‘seizing’ nature of the NEP.
How I understand it, is that in this type of income tax regime, you would be subject to different income tax structures based on your race. So, naturally, if you are a bumiputera you will end up on another tax scale, paying less tax than your less fortunate ‘later-immigrant’ countrymen.
At first glance, it looks terrible, reeking of political incorrectness and racial discrimination on the highest levels.
However, if introducing such a system means that businesses no longer need to set aside 30% of their equity in perpetuity for bumi patrons of the ruling party, nebulous racial equity targets are dismantled and that there will only be one housing price for every Malaysian, then it may not seem that bad after all.
After all, as far as I can see in the current personal income tax system, Muslim bumiputera are already allowed to deduct their total zakat or tithe contributions off their payable tax, and not just dock it off taxable income like how the rest of us infidels have to treat our tax-free donations.
In that light, it is not entirely inconceivable why a race-based tax system should not be introduced provided all the other cumbersome requirements of the current NEP are done away with. It could also mitigate political fallout from an NEP withdrawal because it is essentially another form of preferential treatment.
Tough times call for tough and out-of-the-box measures but are Malaysians mature enough to accept them?
Technorati: Malaysia, NEP, race
posted by hew @ 12:44 pm
0 Comments:
Post a Comment
<< Home