Malaysia to generate at least RM8.5 bln additional revenue via Cukai Makmur

Head of research Kenny Yee said that from Rakuten's calculation, at least 120 companies would be taxable under Cukai Makmur, which has been announced by the government in Budget 2022 on Friday.

"I think for the FTSE Bursa Malaysia KLCI (FBM KLCI) constituents, all companies will be impacted.

"First and foremost, I think (Cukai Makmur) is necessary to finance some of the initiatives, to revive the economy and to assist those affected by the pandemic," he said during the Post-Budget 2022 commentary.

Under Budget 2022, the government has proposed the Cukai Makmur on companies that generate income above RM100 million would be taxed at 33 per cent, while a 24 per cent tax rate applies for chargeable income to the first RM100 million for the year of assessment 2022.

Yee noted that Cukai Makmur has come as a big surprise for industry.

However, Yee said the impact on the stock market in the first half of next year would be quite neutral.

"We will revise downward our index forecast for this year, from 1,650 to around 1,630. As for next year, I think the index should be trading at around the 1,750 level as we move forward," he said.

Meanwhile, Yee expected the FBM KLCI to be in the region of 1,530 to 1,580 next week due to heightened market volatility.

On the threshold for palm oil windfall profit levy at 3 per cent nationwide, he said it would be bumper season for planters this year.

"I have come across the article today. I think some of the planters are not happy about it, while those in Peninsular Malaysia are neutral.

"But if you look at crude palm oil prices, it has been rising to record highs, nearing RM5,500 per tonne at the moment," he said.

The government has agreed to raise the windfall profit levy rate for planters from 1.5 per cent to 3 per cent under Budget 2022.

The government has also proposed to increase the threshold price for the windfall profit levy for Sabah and Sarawak to RM3,500 from RM3,000 per tonne next year -- together with an increase to RM3,000 from RM2,500 for oil palm companies in Peninsular Malaysia.