“Any additional profit that the IPPs make are due to improving efficiency and cost control. It is not due to market forces,”. Which is quite true when you think about it. Their profits remains the same whether fuel prices increase or not but we must know that since they are protected by cost fluctuations of their fuel which is in other words subsidized by the government or in other words the peoples tax money.

But the statement by the government that they want to tax 30% of the companies return of assets(ROA) which exceeds 9% is too general. Return of which assets? The company as a whole or only the assets in operation in Malaysia which is directly enjoying the subsidies. IPPs like Tanjong and YTLPower has holding outide of Malaysia and for the case of YTLPower, 71.3% of their revenue comes from overseas operations. So I'm thinking if they are taxed on assets overseas which are not enjoying any subsidies, is it fair? I mean they are already paying the government tax for their revenues from overseas. Well I guess we have to wait until the details are out before we can judge how fair the tax will be to them.

An article in The Edge stated some possible scenarios and according to CIMB in the article, the effects on the tax could be much worse than predicted since they aren't sure which assets will the tax be based on. The article can be found here.