Tax System Should be More Competitive, Says Manufacturers Group

FMM In The News: FREE MALAYSIA TODAY, PETALING JAYA, Friday, November 6, 2020 – The Federation of Malaysian Manufacturers (FMM) has welcomed the 2021 Budget, describing it as commendable and focused on protecting jobs and companies.

For the manufacturing sector, FMM president Soh Thian Lai said Putrajaya has given initiatives and incentives geared towards revitalising the economic landscape by attracting investments, driving digitisation and better access to financing, among others.

However, Soh said FMM’s wishlist was not fully met, particularly its call for a waiver of corporate and individual income taxes for the 2020 and 2021 assessment years.

“FMM had also called for a more competitive tax regime for both corporate and tax rate. We note that the personal tax rate reduction was only a 1% reduction for those under the income bracket of RM50,001 to RM70,000.

“We believe that this reduction could have been extended to the other income brackets as well,” he said in a statement tonight.

He also said more government resources should be allocated to promote Industry 4.0 and digitalisation, adding that small and medium-sized enterprises (SMEs) needed the assistance.

“It is important to upgrade SMEs’ technical capabilities and capacities concurrently to strengthen backward linkages and thereon to help SMEs transform and grow their operations to become more competitive suppliers and world-class manufacturers.”

While welcoming the extension of tax incentives to attract foreign firms to relocate their operations to Malaysia, Soh said it should also be extended to existing investors who already received approvals for new projects in 2019. 

He also welcomed the intention to introduce a global trading centre but called for the details on the conditions and guidelines to be released soon.

FMM welcomed the allocation of RM42 million to upgrade internet connectivity in 25 industrial areas but more industry areas should be covered with faster and affordable high-speed broadband.

Article Reference : FMM