This article first appeared in The Edge Financial Daily on March 22, 2019

KUALA LUMPUR: The government has no intention of imposing a windfall tax on banks, Finance Minister Lim Guan Eng said yesterday.

He said this in clarifying his remarks at the Invest Malaysia 2019 conference on Tuesday, where he reportedly told banks: “Be flexible, unless you prefer windfall tax.”

Speaking to reporters in Parliament, Guan Eng said what he had told the banks at the conference was that “since we do not impose windfall taxes, please lend more, please be more flexible with the lending arrangements”.

The minister said the media should have taken note of the context in which he had spoken about the windfall tax.

“What I was saying is that we do not charge windfall tax [and] I’m sure you do not want the government to impose it. And everybody [at the conference] was laughing.

“If you look at the context of what I said, there is no intention. Just that since we don’t impose a windfall tax, we hope [banks] can be more flexible in their lending arrangements since they are making so much money,” he said.

On another matter, Guan Eng said former finance minister Tun Daim Zainuddin is the best person to lead the negotiation with China on the East Coast Rail Link as it involves a big and sophisticated contract.

Guan Eng said he had a full-time job as the finance minister and it was therefore appropriate to appoint another person to handle the negotiation.

“If I was selected to lead the negotiation, when would I have the time to do other work? And remember, we have to travel to Beijing very frequently. That’s a seven-hour flight, unlike Singapore which is only a one-hour flight,” Guan Eng said.

On Wednesday, Prime Minister Tun Dr Mahathir Mohamad said the government picked Daim as the key negotiator due to his skills. He was responding to a question in Dewan Rakyat as to why Daim, and not Guan Eng, was leading the negotiation with China.

Guan Eng said that in Daim, Putrajaya has the best person to do the renegotiation, and that he is able to explore all other avenues, as he is not so tied down by protocol.

“And this is what we want, to cut to the chase — [in a] straight forward manner. And when he comes to a resolution — and we are very confident that he can come to a resolution — and comes to the cabinet, [the] cabinet [will] make the final decision,” he said.