Hot on the heels of the highly generous 12-year tax-free status for Lynas Corporation comes another huge ‘GIFT’ – this time for the oil and gas big boys.
While the government seems intent on cutting subsidies on selected essential goods used by ordinary Malaysians, it is dishing out more corporate subsidies, oops, I mean ‘incentives’, to a small band of lucky firms in the lucrative oil and gas sector.
There is a 100 percent 10-year ‘Investment Tax Allowance’ for firms involved in petroleum refining.
The Edge notes that among the US$20bn oil and gas projects in 2012 are the Rapid project in Pengerang, the oil and gas terminals in Johor and Sabah, and the regasification plant in Malacca.
Apart from this, LNG trading companies will enjoy a three-year 100 percent income tax exemption under an appropriately named GIFT (Global Incentive For Trading) programme. What is the justification for this ‘gift’ of a 100 percent income tax exemption? And then we wonder why there is a fiscal deficit!
While the government dishes out generous tax exemptions to the corporate sector, it is now mulling a Goods and Services Tax that will hit many ordinary Malaysians, especially low- and middle-income workers who are currently exempted from income tax. But of course the GST will only come AFTER the general election (if the BN wins, that is). Meanwhile, enjoy the RM500 and RM250 cash handouts (vote buying?) while it lasts.
It is policies such as these that have contributed to the widening gap between the rich and poor.
In fact, corporate subsidies are never referred to as such. Instead many euphemisms are used: soft loans, income tax allowance, pioneer status, tax relief, tax exemption etc – even though these are all obviously subsidies. So whenever there is any discussion about removing subsidies, all these generous subsidies to the corporate sector are never mentioned.
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What’s the fuss? I welcome rapid to move us deeper into the value chain of oil and gas. We must move in this direction. This is one project which will give us further niche in the world oil and gas market. The investment by foreigners is huge and we get more Malaysians involved in this. In this case I applaud jala for the far sightedness.The investments breaks and schemes have worked in the past. See Penang itself.
fair comment ellese if you are in the oil and gas industry. but how much have we ordinary poor malaysian gain from that ‘niche in the global market’??? 90% of malaysians living below povertyline.
Apa GST ??? Satu habuk pun tarak. Jangan tipu lagi. Tiada GST di Malaysia.
GST = Gila Spin Trademarked by Pakatan
Always in a state of denial and still spinning half truth and lies GST is General Sales Tax and at 4%. Give it to you and take it back 10 times. Lets take a look of how much they value Malaysian 500(BRIM) + 500 BRIM 2) = RM1000 RM1000 divide 55 years = RM18.18 per month RM18.18 divide by 12 month = %M1.51 per month RM 1.51 = 30 days + RM 0.05 per days Nilai Rakyat Malaysia = RM0.05 per day Telah ditipu, adakan akan terus ditipu Pilihan di tangan anda Jangan terus ditipu. GST akan dilaksanakan selepas GE… Read more »
Hi everyone, Investment Tax Allowance, whether of Oil & Gas or other industry, if necessary, need not be in the form of a 100% tax exemption for 10 years! It could be on a graduated scale from year to year, maybe of 0% tax (say for first 2 years) to full tax in say 10 years after starting operations. The graduated scale depends on the type of industry that the country intends to promote and attract! By giving 100% tax exemption, with most probably no regards to gestation period, it is obviously to favour the big boys and crony companies… Read more »
same story of cronies n big gifts– same song by the old singer– are malaysians not tired oh hearing this same story n song for the last 30 years,, change the singer n listen to a new song OF HOPE N A BETTER FUTURE,, no more cronies — OF HOPE lah.. change we must – voters please HELP to realise this dream
The malaysian gahmen milk the citizens and rewards the foreigners and cronies.