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The Associated Chinese Chambers of Commerce and Industry Malaysia (ACCCIM) hopes that the 2023 Budget, which will be tabled on Feb 24, will adopt strategies and initiatives in ensuring prudent and productive spending to sustain economic and business resilience.
Looking forward to a responsible and pro-business budget, the association said it is time to revitalise private investment, especially domestic direct investment (DDI) and to implement measured reforms for the growth and industry sustainability.
“We urge the government to pay particular attention to tackling cost related bottlenecks in the business regulatory environment and completely move away from too many bureaucratic and cumbersome rules as well as high compliance costs,” it said in a statement.
ACCCIM added that addressing those issues would reduce the cost of doing business and the cost of living.
It said as the global economy is facing a weakening economy worldwide, businesses must manage increased cost pressures, including operating cost and cash flow problems as well as high prices of raw materials.
Additionally, other concerns are the shortage of workers as well as additional employment costs coming from the implementation of the Employment (Amendment) Act and higher electricity tariffs for industrial and commercial users.
Hence, ACCCIM suggested a lower income tax rate at 15% and higher preferential threshold (RM1 million) to help SMEs ease their cost of doing business.
To encourage existing companies to plan and upgrade their production capacity and processes as well as diversify their products, it calls for a reinvestment allowance (RA) to be extended to 20 years, additionally five years from current RA of 15 years.
It noted that higher capital expenditure threshold may encourage automation in all economic sectors.
“This can be done by standardising and increasing the qualifying expenditure for accelerated capital allowance (ACA) for both Category 1 (high labour-intensive industries) and Category 2 (industries to RM10 million from RM4 million and RM2 million, respectively).
ACCCIM also proposed the government to ease operating and employment costs of small and medium enterprises (SMEs) due to the implementation of the Employment (Amendment) Act 2022, by co-sharing the additional 38 days maternity benefits, increasing it to 98 days from 60 days.
Moreover, the association suggested the government consider reviewing a surcharge at the rate of 20 sen/kWj for the period of Jan 1 to June 30, 2023 on the medium voltage (MV) and high voltage (HV) users, which have impacted SMEs’ financial burden.
“There should be tax incentives and financial assistance for the tourism sector, and additionally, the government must encourage more food production,” it urged.
Furthermore, ACCCIM said SMEs require the support of facilitation funds and advisory to transition into industrial revolution (IR) 4.0 and embrace environmental, social and governance (ESG), including reducing carbon footprint.
“Cut in personal income tax rate for the middle-income wage earners and below to help mitigate the impact of inflation and cost of living pressures,” it concluded.
Source: https://themalaysianreserve.com/2023/02/21/acccim-calls-for-responsible-pro-business-budget/