PETALING JAYA: The government should withdraw its proposal to remove tax exemption for foreign-sourced income (FSI) while there is still time to do so, a DAP MP said today.
Bangi MP Ong Kian Ming said it was not too late to withdraw the removal of the FSI tax exemptions as part of the proposed amendments to the Income Tax Act 1967.
“We hope the finance minister (Tengku Zafrul Aziz) will consider the various viewpoints from MPs as well as from the industry on this specific issue,” he said in a statement.
Ong is the second DAP leader after party secretary-general Lim Guan Eng to call for the removal of tax exemptions for overseas income.
In a statement last week, Lim said the move could end up being counterproductive to Malaysia.
Ong concurred, saying that Malaysians in high-paying jobs in Singapore may choose to invest their retirement savings in assets and properties there instead of in Malaysia due to better tax policies.
“Malaysians that reach retirement age in Singapore can withdraw savings from their Central Provident Fund (CPF) but these savings will now be subject to income tax if they bring any of it back to Malaysia.
“The withdrawal of the tax exemption gives them reason to retire in Singapore or some other country where their savings will not be taxed,” he said.
He said Malaysians may also decide to give up their citizenship because non-residents who bring money into the country are not subject to the same income tax considerations as Malaysians.