CORPORATE TAX INCENTIVES SHOULD BE LINKED TO FAIR WAGES, CSR - BACKBENCHERS CLUB

KUALA LUMPUR, Oct 13 (Bernama) -- The government has been asked to review corporate tax reliefs especially for companies that record windfall profits but maintain a very large salary gap between top management and the lower-level employees. 

Backbenchers Club (BBC) chairman chairman Datuk Mohd Shahar Abdullah said the time has come to implement the principle of tax fairness, whereby tax incentives are linked to the fair wage policies and corporate social responsibility (CSR).

“In addition, strengthening of trade unions must be included as part of economic structural reforms. Today, only six per cent of Malaysian workers are involved in unions.

“This is much lower than in South Korea (13 per cent), Indonesia (12 per cent), and Sweden (65 per cent),” Mohd Shahar said during the 2026 Supply Bill (Budget 2026) debate in the Dewan Rakyat today.

According to him, a strong union not only fights for workers' rights but also helps ensure that wages and productivity grow in tandem.

He suggested that increasing the share of the compensation of employees (COE) should be made the main focus in boosting the country's economic fundamentals.

“When a larger portion of gross domestic product goes into wages and employee compensation, it directly increases household disposable income, stimulates domestic spending, and strengthens economic resilience,” said Mohd Shahar.

Meanwhile, he also suggested that the frequency of the Rahmah Cash Contribution (STR) payments be revised from quarterly to monthly or fortnightly, as implemented in India.

Mohd Shahar said this move can help people manage expenses better and avoid periodic spending spikes.

“Cash aid is not a permanent solution. The government needs to move to the next level through progressive minimum wage growth, workforce retraining, and community economic empowerment so that people can enhance their own competitiveness,” he added.

Mohd Shahar also outlined three key reforms in the housing sector to address the increasingly apparent structural imbalances in the nation’s housing market.

He said property tax reforms should be implemented by progressively replacing the real property gains tax (RPGT) with a capital gains tax (CGT), as well as introducing speculation and vacancy taxes to curb activities related to keeping unsold housing units vacant.

Furthermore, housing planning governance needs to be streamlined through a model based on actual demand as well as state revenue reforms, so that development planning does not solely depend on high-priced projects that are less affordable, he said.

In addition, he proposed introducing targeted protection for first-time homebuyers and conducting a review of the Malaysia My Second Home (MM2H) programme to ensure that foreign investments do not add to the glut of luxury properties in the market.

-- BERNAMA