Yeah Kim Leng of Sunway University said a wealth tax would be difficult to implement successfully due to competitiveness of neighbouring countries, while European countries such as France and Germany have ditched wealth tax due to low revenue yield and high administrative problems relative to their economic cost.

He said there were more feasible and superior alternatives to a wealth tax in current reforms which already focus on broadening the SST, enhancing tax administrative efficiency, imposing dividend tax on unlisted shares and rationalising subsidies.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said fuel subsidy reforms were a more sustainable way to strengthen the government’s coffers. They would result in “significant savings which can be channelled back to deserving recipients of financial aid”, he said.

Afzanizam said the personal income tax structure was already relatively high for top earners. “Those with chargeable annual income of above RM2 million are taxed at 30%, while those earning between RM600,001 and RM2 million are taxed at 28%,” he said.

Last week former Klang MP Charles Santiago called for a 2% wealth tax which he said could raise RM1 billion to help plug a RM10 billion shortfall in the government’s finances. He said the 50 wealthiest Malaysians had increased their fortunes by RM103 billion in a year, bringing their combined wealth to RM458 billion.

Afzanizam said striking the right balance is key in policymaking, pointing out that everyone has a role to play in contributing to the economy, irrespective of income level.

Yeah added that wealth taxes were often abandoned because of their costs, risks and “unintended consequences”.

“Entrepreneurship could be dampened and valuation distorted by ‘hard to value’ assets,” he said, adding that a wealth tax would run contrary to Malaysia’s ambitions to attract single family offices and position itself as a regional wealth hub.