PETALING JAYA: The implementation of the inheritance tax and capital gains tax will have more drawbacks than benefits, said the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
The association strongly opposes the imposition of such taxes, saying that these taxes would cause capital outflows while stifling the Malaysian entrepreneurs’ spirit of creating wealth and corporate elites’ desire to innovate and prosper.
“In our opinion, these taxes would dampen economic growth in many ways: stifle the growth expansion of small and medium enterprises (SMEs) and family business, discourage capital formation and savings as well as induce corporates and investors to move their assets and investments abroad.
“As in the case of capital gains tax, it increases the marginal cost of investing in Malaysia as foreign investors already marginalised Malaysia equities,” it said in a statement today.
ACCCIM said overall, these taxes will result in subdued market environment, which is not conducive to attract the inflows of private capital and foreign direct investments that are needed to drive Malaysia’s economic growth and capital market development.
On the 2019 Budget, ACCCIM has submitted its proposals, which include the staggered reduction in the corporate income tax rate to 18% and a lower tax rate for SMEs of 15% for the first RM2 million chargeable income.
It also urged the government to consider raising personal tax relief for individuals to RM10,000 from RM9,000; ease the burden of low and middle-income households through the lowering of personal income tax rate; and enhance the competitiveness of all economic sectors and stimulate domestic consumer spending.
It said that the government must continue to create and enhance a business-friendly environment to support domestic businesses and attract foreign investment.
“We believe that through enhancing corporates’ competitiveness, flourishing their growth and profits, more revenue will be collected by the government instead of widening the tax base or increasing any tax rate to increase the government revenue.
“We view this as a long-term strategic policy to create a win-win situation for both the government and private sectors,” it added.
Source: The Sun Daily