Muted prosperity tax effect on ringgit

Maybank's Saktiandi Supaat: Fiscal deficit to gross domestic product (GDP) is estimated to narrow to 6% in 2022 from 6.5% in 2021. “This ratio could further improve to 5% from 2023 onwards while reaching the target of the 12th Malaysia Plan or 12MP (2021-2025) of between 3.0% and 3.5% in 2025. This bodes well for the ringgit against the US dollar."

PETALING JAYA: The one-off Cukai Makmur or prosperity tax announced under Budget 2022 and episodes of political uncertainty will not significantly weaken the local currency against the US dollar.

Malayan Banking Bhd head of forex research Saktiandi Supaat told StarBiz the prosperity tax could in the near term potentially have a drag on the equities market as a result of the tax on earnings of companies.