Proposed CGT will stunt economic growth, says MPs

Datuk Johari Abdul Ghani (BN-Titiwangsa) said the proposal could be seen as not business-friendly and make the nation less competitive.

Instead, he said, the imposition of the GST in April next year was a strategy to revise the tax system to become more comprehensive, transparent, business-friendly and able to generate a more stable income.

"The CGT is used in America, the United Kingdom or other European countries which have already attained the status of developed nation. Malaysia has not yet achieved that status.

"Malaysia needs domestic and foreign investments to boost the national revenue and create more job opportunities to achieve the status of developed country by 2020," he said when debating on the Supply Bill 2015 in the Dewan Rakyat, here, today.

Last Thursday, Pakatan Rakyat (PR) proposed the CGT to replace the GST to increase national revenue in the PR Alternative Budget 2015.

Johari said potential investors could be discouraged as their profits would be imposed the CGT.

"The CGT could turn away foreign investment as it is a tax on capital gains.

As such, the national economy would not grow," he said.

Meanwhile, Datuk Ahmad Fauzi Zahari (BN-Setiawangsa) noted a newspaper report in the United Kingdom in 2013 on an economics expert there stating it was not true that the CGT could increase national revenue.

Earlier, Tan Sri Annuar Musa (BN-Ketereh) said the proposal for the CGT contradicted the stand of opposition leader Datuk Seri Anwar Ibrahim who in 1993 when he was Finance Minister said that he rejected the value-added tax (VAT) used in western countries.