KUALA LUMPUR (June 20): Any move to impose a windfall tax on glove companies given their supernormal earnings due to the Covid-19 pandemic would only curb their expansion programme, said Malaysian Rubber Glove Manufacturers Association (MARGMA) vice president Dr Supramaniam Shanmugam.
In the third session ‘Challenges and Opportunities for Malaysian Glove Sector Post Covid-19’ at the second instalment of the Invest Malaysia 2020 virtual conference today, Supramaniam highlighted that a 24% corporate tax is already imposed on companies, which means government revenue from the said tax also increased alongside with the bumper earnings seen now.

“If your question is whether a windfall tax is fair or not, I think it is left to the powers that be, because they (the government) would realise that 24% of a bigger quantum is a lot more money for the government.
“And if it is anything beyond that, [it] is going to curb our own expansion programme, and the final result would be that if you don’t expand, others will expand and take up market share, and we do not want that,” he said.
He noted that the rubber glove industry has reinvested close to RM600 million to RM1 billion a year annually because of its organic expansion.
“Forget if there is Covid-19 or no Covid-19, it is an organic expansion that continues to expand because of the fact the global demand increased by 10% to 12% if there was no Covid-19 at all. So, I suppose whatever profits we have after paying our taxes, would also be ploughed back into our expansion,” he added.
With the impact of Covid-19, MARGMA is projecting an estimated global demand of 330 billion gloves this year and an expected annual growth of 20% this year.
Supramaniam noted that Malaysia’s market share is two-thirds of the total global demand, resulting in a projected export revenue of RM21.8 billion.
Going forward, he said demand for gloves post-Covid-19 is still expected to be higher than the pre-Covid-19 levels at 17%.
Likewise, glove selling prices will also increase accordingly, he noted. “We don’t know how it will be post-Covid-19, but the prices are going to be higher than pre-Covid-19 times, while it may not be higher than the Covid-19 times,” said Supramaniam.