PETALING JAYA: After Malaysia's stock market tumbled sharply on Thursday (Oct 11), Datuk Seri Najib Tun Razak asked if the country's future was still bright under the Pakatan Harapan government.
The former prime minister pointed out that not too long ago, there was a comment that the future of the country was dark under his administration.
"Looks like the future is bright under the Finance Minister," he said sarcastically in a Facebook post that was accompanied by a graph of the FBM KLCI that showed it decline sharply in the past two days.
"But what is happening under the new government today. Tax upon tax is going to be introduced, said to lighten the people's burden. Arrogant, cruel and inhumane. Where are we headed to, Malaysia?" he said.
At 9.11am, the KLCI was down 52.20 points or 3.01% to 1,682.98.
The performances of the local bourse and in Asia were spurred by the overnight tumble on Wall Street after interest rates in the country were raised.
In another Facebook post, Najib said the plan to introduce Capital Gains Tax (CGT) over the purchase of stocks was not a good idea though the government would lose up to RM40bil because of its populist moves including replacing the Goods and Services Tax (GST) with the Sales and Service Tax (SST).
"At first glance, CGT on the trade of stocks looks populist. Why are the rich and those who gain profit by playing stock not taxed? If we tax them, the income gap between the rich and the poor will be less, right?" he said.
Najib said opinions such as these were populist and liked by the people, but its impact was big as the country and its people would suffer losses.
He said that Singapore and Hong Kong, which have more active and bigger stock markets, did not impose CGT.
"If CGT is introduced here, the likelihood of both local and foreign investors to trade in Malaysia will decline. They would choose other bourses to invest because they would not be taxed," he said.
He added that companies that want to be listed on the bourse would have difficulty in doing so to get additional capital to expand their business or to build new factories.
"Because of this, their business can't grow further, affecting job creations and economic activity. In this era of globalisation, it is easy for Malaysian companies to list themselves on the stock exchange of other countries," he said.
Najib said that the biggest investors in Malaysia are institutions owned by the EPF, Tabung Haji, PNB and private trading companies.
"When the demand for Malaysian shares falls, the prices will fall and result in losses to these institutions," he said.
He said that he introduced GST, thinking that those who profited from the stock market would spend more.
"We taxed through the GST when they spend their profit. Those who spend more will be taxed more GST compared to those who spend less," he said.