Categories: EconomyNews

PSM urges Asean to develop internal regional market, halt corporate tax cuts

by HIDAYATH HISHAM 

THE Socialist Party of Malaysia (PSM) has called on the Association of Southeast Asian Nations (Asean) to prioritise the development of an internal regional market and to stop the ongoing reduction of corporate tax rates among member countries.  

In a memorandum addressed to Prime Minister Datuk Seri Anwar Ibrahim, PSM outlined the economic challenges facing the region and proposed strategies to create a more equitable and inclusive Asean.  

“If the internal market in the Asean region (which has a combined population of 690 million) can be developed, it will bring several benefits to our economy including market expansion for local goods, opportunities for new investments, generation of new jobs, and an increase in tax collection,” PSM said.  

While the GDP of many Asean nations has seen substantial growth, the incomes of ordinary workers have stagnated.  

Citing Malaysia as an example, the memorandum explained that GDP had increased 25 times in real terms over the last five decades, yet the majority of the population remains burdened by debt and economic insecurity.  

The memorandum also mentioned the need to end the “race to the bottom” in corporate tax rates among Asean countries.  

PSM said the competition to attract foreign direct investment (FDI) has significantly reduced government revenue.  

In Malaysia, the ratio of government income to GDP has dropped from 30% in the 1980s to 15% last year, largely due to cuts in corporate tax rates.  

The party said this reduction has hampered governments’ ability to fund social programmes and environmental initiatives.  

To address this, PSM recommended a coordinated approach where Asean countries gradually increase corporate tax rates to 30% of gross profits over the next decade.  

“This matter should be taken seriously by Asean and steps taken to increase corporate tax gradually and simultaneously,” it said.  

Other issues raised in the memorandum included the need for a robust carbon tax to address the climate crisis, strategies to combat youth unemployment, and the importance of regional collaboration to develop green industries.  

PSM also stressed the importance of improving refugee rights, suggesting that Asean countries allow refugees to work legally and allocate funds from work permit fees to cover their medical costs.

In the Asean Extradition Agreement, the party called for mechanisms to ensure that human rights activists and political refugees are not unfairly extradited.

The memorandum was endorsed by a broad coalition of organisations, including Aliran, Greenpeace Malaysia, Sisters In Islam (SIS), and the Women’s Aid Organisation (WAO).  

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