THE Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) today expressed concern that the proposed capital gains tax on the disposal of non-listed shares in 2024 in Budget 2023 will widen to cover other asset classes, leading to capital outflows.

ACCCIM, nonetheless, described the budget that was tabled by Finance Minister Anwar Ibrahim as a “responsive and inclusive growth-oriented budget” encompassing everyone – the people, businesses and industries.

The budget also indicated the government’s commitment to rebuild fiscal space for future economic shocks, its president, Low Kian Chuan, said in a statement.

He said the budget had included a more “targeted subsidy rationalisation approach”, gradually reducing debts and liabilities, exploring new sources of sustainable revenue and minimising leakages as well as prioritising public expenditure.

Low said ACCCIM also welcomed the reduction in company income tax rate for small and medium enterprises (SMEs) to 15% from 17%, but on the other hand, it would have liked the preferential threshold tax to be revised higher to RM1 million or at the current threshold of RM600,000 from the budget proposal of RM150,000.

He said the higher threshold would help businesses to be more competitive and have leeway to reinvest with the tax savings.

Low also said the budget, in integrating environmental, social and governance into business practices, would enhance economic resilience and sustainability.

“Despite budgeting a new record high development expenditure of RM97 billion, the government remains fully committed to fiscal consolidation and ensuring debt sustainability as it targets a reduction in budget deficit to 5% of GDP or RM93.9 billion in 2023 from 5.6% of GDP or RM99.5 billion in 2022,” he said.

Low said continual business and economic reforms must be a priority for the government and it must bring in measures to ease doing business, revitalising investment, generate jobs, a competitive tax regime and conducive investment climate as well as efficient public delivery services.

That, he said, will help Malaysia boost investor confidence and economic growth.

He said ACCCIM also welcomed the host of measures and initiatives to enhance economic resilience, boost economic growth, mitigate cost of living pressures, manpower development and income as well as employment generation, and enhance the micro, small and medium enterprises’ (MSMEs) eco-system.

“The budget is fittingly focused on increasing support for MSMEs, providing credit facilities and guarantees as well as other incentive measures,” he said.

Low said while there are incentives for the private sector to hire fresh TVET graduates, MSMEs need financial relief to help ease their operating costs.

The MSMEs, he said, had suffered increased cost pressures from all fronts, including higher electricity tariff and the implementation of the Employment (Amendments) Act.

The budget proposal on increased capital allowance in the manufacturing, services and agriculture sectors to RM10 million to encourage automation had fulfilled one of items on ACCCIM’s wish list, he said.

“We welcome the initiative to facilitate investment through the enhancement of processes and easing of bureaucratic rules by incentivising the local authorities for expediting the process of approved project implementation,” he said.

“However, we hope that the federal, state and local authorities and relevant stakeholders will coordinate and streamline their approval process.”

On the roll-out of the New Industrial Master Plan 2030 in the third quarter of 2023, Low said ACCCIM is looking forward to it and hopes for engagement with the business chamber and industry associations for inputs.

“The master plan must focus on how to deepen the industrial linkages between domestic SMEs and foreign direct investment as well as design a development programme to help SMEs towards the Fourth Industrial Revolution,” he added. – February 24, 2023.