Rae

THE government’s RM332 billion budget will pave the way for economic recovery and enhanced resilience but funding must be disbursed at a timely manner, the Associated Chinese Chambers of Commerce (ACCIM) said today.

Any positive impact, it said, will be impacted by tardiness of government agencies.

“It is of the utmost importance that ministries and agencies enhance their efficiency, strengthen the capacity to implement projects and disburse the money in a timely manner,” it said in a statement.

“Expansionary spending will not necessarily lead to a positive impact on economic output and income growth if the multiplier effect is restrained by inefficiencies, delay in implementation and cost overruns.”

The association also lauded the government for providing cash to the B40 group, credit facilities for micro, small and medium sized enterprises (MSME), tax breaks, creating job opportunities and up-skilling of employees. 

However, it said that the one-off windfall tax may cost Malaysia in terms of its competitiveness in the region.

“The higher corporate tax rate would make Malaysia less competitive to our regional peers, and hence dampen investment interests. 

“The government needs to reaffirm that this is a special ‘one-off’ tax contribution, while it should commit to a long-term competitive tax regime and predictable tax policy.”

Finance Minister Tengku Zafrul Tengku Abdul Aziz announced the new tax as part of the government’s initiative to refill its coffers.

It will see companies who have profited during the epidemic be subject to a 24% tax for the first RM100 million of taxable income and 33% for the subsequent amount. 

This will come into effect for the year of assessment 2022. 

The association asked that the government further increase the targeted relief recovery facility for SMEs to ease their financing needs.

This facility has been increased by RM2 billion in Budget 2022, taking the fund to RM11.2 billion.

It is also asking that the government consider providing incentives such as tax and financial rebates to companies looking to pivot to sustainable development goals, which may incur higher cost in the start.

This, it said, is in line with the government’s green initiatives and net zero goals. – October 29, 2021.