KUALA LUMPUR – A wealth tax targeting Malaysia’s super-rich could be an effective means to fund social protection programmes, according to former Klang MP Charles Santiago.
In a series of posts on social media platform X, Santiago proposed a 2.5% wealth tax on the country’s top 50 wealthiest individuals.
He claims this could generate RM10 billion, which could then be channelled into various social initiatives.
“By redistributing wealth, we can tackle poverty more effectively and ensure that everyone has access to basic necessities and social security,” Santiago said.
This comment followed his participation in a virtual forum hosted by Singapore’s ISEAS-Yusof Ishak Institute, which discussed the Malaysian government’s Madani Economy framework and the challenges faced by B40 families.
Santiago also urged for the introduction of a Free Meals Programme to combat child undernourishment.
He suggested that the government collaborate with government-linked companies (GLCs) and local entrepreneurs to provide these meals, which could create jobs and support small businesses.
Currently, the government runs the Supplementary Food Programme (RMT) in schools, benefiting children from impoverished households.
Santiago also expressed concern about insufficient savings in the Employees Provident Fund (EPF), describing it as a looming crisis, particularly with the country’s ageing population. He noted that 6.3 million EPF members under the age of 55 have less than RM10,000 in their accounts.
“With 5.7% of elderly households living in absolute poverty, we need mechanisms like monthly pension aid funded by KWAP, which has an RM190 billion fund size,” added Santiago.
He also advocated for the progressive wage policy – led by the Economy Ministry – to include the three million informal and gig workers. These workers, often earning below minimum wage and lacking social protection or insurance, are among the most vulnerable labour groups.
“Including them in this policy is essential to lift them out of poverty and ensure financial stability,” Santiago said. – July 24, 2024