Should We Demonise the “Maha Kaya”?

 

It has become somewhat fashionable to portray the rich as parasites that drain a country’s welfare. There is clamouring for the rich to pay their fair share of taxes, and subsidies for the rich are seen as a huge negative in Malaysia. The point made for reducing or eliminating petrol subsidies is to prevent the rich from benefiting from subsidies that are meant for the poor. Another argument is that the rich waste subsidised petrol as they have more cars using cheap fuel.

 

Source: https://www.wikihow.com

 

In painting a negative picture of the rich, it is silent that they pay the bulk of personal income tax. According to reports, the top 20% income group (T20) contributed RM33.68bil, or 85%, of the RM39.26bil personal income tax collected in 2022. That amount is only expected to rise in the future. A person with a chargeable income of RM200,000 pays about RM33,400 in taxes. An increase in chargeable income results in a higher effective tax rate and higher tax payment.

So even if the T20 individual is “benefitting” from subsidised petrol, the amount saved is usually less than the amount paid in taxes. The T20 also helps the government provide other welfare services and goods, such as universal healthcare. There is no doubt that the T20 is one of the main drivers of domestic consumption, which drives the domestic economy. About half of the country’s consumption activity is attributed to them.

 

Who is spending on expensive cars, buying luxury houses, eating at nice restaurants, and shopping at boutiques around town? It is primarily going to be T20 players and even well-to-do tourists. Because of the spending of the “rich”, all those businesses employ tens of thousands of workers. It is certainly not the bottom 40% income group that is being wooed when it comes to attracting investors and residents.

 

Because of their spending power, Malaysia will target the rich for its “Malaysia My Second Home” programme. Making the T20 look like bogeymen serves no purpose. When salaries are combined, reaching the T20 threshold is not difficult for a household.

 

As Malaysia aims to attain high-income status, we must refrain from painting the T20 as leeches in the national economy. It is not they who will further burden the welfare economics employed by the government. No one wants to remain poor. Given a chance everyone will choose riches and happiness. There are countries that are welcoming the rich to reside in, so we should not chase ours away.

 

Reference:

Demonised for being rich, Jagdev Singh Sidhu, Insight/The Star, 9 August 2025