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Minister says there’s room to grow palm oil exports to China

NANJING, China, Oct 23 — There is still room to grow Malaysia’s palm oil export to China given the continuous increase in demand and consumption, says Primary Industries Minister Teresa Kok. She said the additional 25 per cent import tax imposed…


Budget 2019 will show investors Malaysia’s economic direction

PUTRAJAYA: The tabling of the 2019 Budget will give clear indications to investors on the government’s economic development plan for next year, said Deputy Economic Affairs Minister Dr Radzi Jidin. He said the tabling of the Mid-Term Review of the 11th Malaysia Plan report last Thursday had illustrated the economic direction of the new administration. […]


Bracing for digital tax in Budget 2019

KUCHING: Digital tax could possibly be announced in the upcoming Budget 2019, Affin Hwang Investment Bank Bhd (AffinHwang Capital) predicted in its budget preview. In its mid-term review of the 11th Malaysia Plan (MP) report, the government said it may be considering imposing a tax on online transactions involving e-commerce and sharing economy activities. “Digital […]


FMM to work closely with govt

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) in congratulating the government on tabling a comprehensive and pragmatic mid-term review plan last week, hopes that proposals to increase government revenue as part of fiscal consolidation would not lead to additional and unnecessary regulatory burden to the manufacturing sector.

“The priority should be to support and promote expansion of the economic pie to enable the reaping of higher returns to enhance business sustainability, and more importantly, medium and long-term growth,” it said in a statement today.

FMM cited existing tax incentives, such as the reinvestment allowance, accelerated capital allowance, double deduction incentives for research and development, export growth, enhancements to facilitate and spur the manufacturing sector to quickly undertake upgrading, expansion and diversification activities, including investing in Industry 4.0 technologies and innovation to achieve higher productivity and value-add.

The organisation also looks forward to close consultation with the government on its progressive and comprehensive multi-tiered levy system mechanisms to empower human capital development.

“We hope to see critical market-based levers namely, simple and transparent criteria; planned and pre-announced changes, especially in levy rates; removal of discretionary approvals, bureaucracy inconsistencies in policy implementation as well as rent seeking activities; and incentives to reward businesses which have reduced their dependence on foreign workers and unskilled labour. Levy collected should also be ploughed back to help finance industry’s investments in automation and productivity enhancements,” FMM said.

Overall, FMM looks forward to close and regular engagement with the government on the relevant programmes and initiatives under the 19 priority areas and 66 strategies of the six policy pillars. We are optimistic that these economic targets and aspirations would be executed and achievable through close collaboration and consultation between the government and the business sector, in particular the manufacturing sector for better fit of policies in meeting the challenging demands of competition and technological advancements.

Commenting on the government’s target of 4.5-5.5% gross domestic product growth over the 2018-2020 period, FMM said it was most reassured that the government is steadfast in pursuing growth targets despite the impact of fiscal and governance reforms on short-term economic growth.

FMM reiterated its commitment to working closely with the government in helping to meet the economic targets.


FMM hopes govt move to boost coffers won’t add to burden

KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) in congratulating the government on tabling a comprehensive and pragmatic mid-term review plan last week, hopes that proposals to increase government revenue as part of fiscal consolidation would not lead to additional and unnecessary regulatory burden to the manufacturing sector.

“The priority should be to support and promote expansion of the economic pie to enable the reaping of higher returns to enhance business sustainability, and more importantly, medium and long-term growth,” it said in a statement today.

FMM cited existing tax incentives, such as the reinvestment allowance, accelerated capital allowance, double deduction incentives for research and development, export growth, enhancements to facilitate and spur the manufacturing sector to quickly undertake upgrading, expansion and diversification activities, including investing in Industry 4.0 technologies and innovation to achieve higher productivity and value-add.

The organisation also looks forward to close consultation with the government on its progressive and comprehensive multi-tiered levy system mechanisms to empower human capital development.

“We hope to see critical market-based levers namely, simple and transparent criteria; planned and pre-announced changes, especially in levy rates; removal of discretionary approvals, bureaucracy inconsistencies in policy implementation as well as rent seeking activities; and incentives to reward businesses which have reduced their dependence on foreign workers and unskilled labour. Levy collected should also be ploughed back to help finance industry’s investments in automation and productivity enhancements,” FMM said.

Overall, FMM looks forward to close and regular engagement with the government on the relevant programmes and initiatives under the 19 priority areas and 66 strategies of the six policy pillars. We are optimistic that these economic targets and aspirations would be executed and achievable through close collaboration and consultation between the government and the business sector, in particular the manufacturing sector for better fit of policies in meeting the challenging demands of competition and technological advancements.

Commenting on the government’s target of 4.5-5.5% gross domestic product growth over the 2018-2020 period, FMM said it was most reassured that the government is steadfast in pursuing growth targets despite the impact of fiscal and governance reforms on short-term economic growth.

FMM reiterated its commitment to working closely with the government in helping to meet the economic targets.


China shares leap 4pc on authorities’ pledges of support, tax changes

SHANGHAI, Oct 22 — China’s benchark blue-chip index surged over 4 per cent today, posting its best daily performance in almost three years, as investors piled into the battered market after coordinated statements of support by senior regulators….


Italy’s coalition seeks ‘dialogue’ with Europe

MILAN: Italy’s ruling coalition patched up a row over a tax amnesty and struck a more conciliatory tone towards European Union (EU) institutions, saying it wanted to discuss its budget plans with Brussels. The coalition included the tax amnesty in measures to fund costly electoral promises that are set to sharply lift the budget deficit […]


Govt urged to focus on reducing operating expenses

PETALING JAYA: Local economists, analysts and a think tank have urged Prime Minister Tun Dr Mahathir Mohamad's administration to focus on reducing the government's operating expenditure, which has been persistently high over the years.

The view comes after Mahathir's presentation on the 11th Malaysia Plan's mid-term review in Parliament last week, which saw the government cutting back its development budget by RM40 billion for the 2018 to 2020 period.

The government, which affirmed that the operational budget will not take a hit, lowered its real gross domestic product (GDP) growth target to 4.5-5.5% annually from 5-6% previously.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew, when contacted, told SunBiz that the operating expenditure related to emoluments, pension payments and gratuities rose more than 9% a year in the past 10 years, while nominal gross domestic product rose just more than 4% over the same period.

He noted that the cut in development expenditure is possibly due to the administration's short-term inability to reduce its operating expenditure without public sector layoffs.

CGS-CIMB Research said it believes the government has room to make fiscal adjustments through determined spending cuts without hurting the country's growth prospects unduly if wastages and leakages are curbed.

It opined that operating and development expenditure can be trimmed by RM7 billion in Budget 2019 due to tighter procurement procedures, zero-based budgeting, reviews or deferment of infrastructure projects, more targeted subsidies and cash transfers, and revisions in supply and services contracts, which could limit the need for aggressive revenue-raising measures and steeper cuts to productive areas of spending.

On GDP growth, CGS-CIMB said despite the target being lowered to 4.5-5.5% in the mid-term review, prospects remain supportive of economic activity and labour market conditions.

Disappointed by the government's preoccupation with tax and increasing costs for business, Institute for Democracy and Economic Affairs director of research and development Laurence Todd said “there are indications that the government is moving in potentially the wrong direction”.

“Further reforms to strengthen the oversight and performance of GLCs are of course welcome, but it is disappointing that the government does not seem to be proposing more radical reforms, including significantly reducing its holding of assets and equities, which could raise revenue and stimulate private sector growth.

“At the same time, the government is proposing to reduce development expenditure – we would recommend that the government focus on improving its balance sheet in a way that raises revenue and maintains the overall level of public investment,” Todd added.

On the flip side, Sunway University Business School Professor of Economics Prof Dr Yeah Kim Leng said the mid-term review, with a strong focus on improving governance, institutional reforms and strengthening the government delivery system, should enable the government to reap some “democracy dividends” on increased investor confidence and sustained private investment activities.

He said the review has lent greater clarity on the policy direction of the new government over the next two years as it has established the priorities, policy thrusts, strategies and targets on what the administration intends to do to address the critical challenges facing the country.

“Understandably, the 'how' part needs fleshing out but it suffices that the focus should be on implementation capacity and capabilities, and, importantly, a consultative approach with all stakeholders especially the private sector, industry groups and NGOs.”

However, he pointed out that income gaps, disparities and inequalities across regions, industries and community groups are structural problems, which will require carefully thought-out intervention programmes.

“These are perhaps too 'micro' to be contained in the broad five-year plan and better fleshed out by the implementing agencies that have been streamlined,” Yeah said.


Italy should not ignore damage to banks from soaring bond yields, official tells paper

MILAN, Oct 21 — Italy’s government should not ignore the problems that soaring government bond yields are causing for Italian banks, including possible capital needs, Cabinet Undersecretary Giancarlo Giorgetti said in a newspaper interview…


Full steam ahead for SMEs

As small and medium enterprises (SMEs) contribute more than one-third to Malaysia’s economy, it comes as no surprise that this segment continues to be recognised by the new government and private sectors as an important growth engine. According to Prime Minister Tun Dr Mahathir Mohamad, the Government is keen to increase the competitiveness of SMEs […]