KUALA LUMPUR: There is an urgent need for Asean member states to work towards an agreement not to circumvent the global minimum tax (GMT) as countries begin to adopt the tax, said Deputy Investment, Trade and Industry Minister Liew Chin Tong.
He also urged Asean member states not to enter into a race to the bottom in terms of wages, tax cuts, or tax holidays but instead to uphold environmental standards.
Liew noted that Asean should emerge as a middle-class society over the next two decades and thus become a sizable consumer market, not just as production sites in the old formulation of export-led industrialisation.
“It (Asean) is used to the old export-led industrialisation model in which we help multinationals suppress wages to make us a cheap production destination. It is also used to give tax cuts or tax holidays to multinationals.
“We will have to stand together and tell the multinationals that we need to collect these taxes for the greater good of our people and for Asean to emerge as a middle-class society, which in turn will be a huge market for all, including the multinationals,” he said in his opening remarks at the Asean Economic Opinion Leaders Conference: Outlook for 2025 here today.
Liew said the GMT was one of the issues the Ministry of Investment, Trade and Industry (Miti) would discuss during Malaysia’s Asean chairmanship.
“But the broader objective is to strengthen the supply chain, strengthen ourselves as a middle power as well as Asean as a strong middle-class society which thus becomes a strong consumer market because, for the longest of time, we have to be dependent on export-led industrialisation,” he added.
Liew said that if the global supply chain were left to the major powers, it would eventually bifurcate as the United States and China extricate themselves from each other.
“It is not in the interest of the rest of the world to see the supply chain bifurcates.
“Therefore, Asean, together with the European Union, the Global South and others, need to do the heavy lifting to ensure that the middle ground or the common ground is big enough to resist supply chain bifurcation,” he said.
In this context, he said the Johor-Singapore Special Economic Zone has the potential to create an exciting future and a role model.
The deputy minister added that more Asean-wide joint investment projects or sub-regional cooperation will help to make the Asean supply chain stronger.
He said that Asean’s non-aligned stance was not born out of a vacuum as it was established precisely because the founders thought that Asean should not be aligned with either side during the Cold War.
“The 2020s is exactly such a moment that we in Asean need to hang together so as not to be hung separately.
“We need to work with each other very closely, and we need to ensure that each Asean member state is economically secure and well-to-do to form a much stronger regional solidarity,” he added. – Bernama
