CIDB wants Govt to cut machinery taxes in Budget 2018

Part of the site which is to be under construction for the ECRL station in Kota SAS, Indera Mahkota, Kuantan.

KUALA LUMPUR: The Construction Industry Development Board (CIDB) has asked the Government to reduce taxes for construction machinery for the industrialised building system (IBS) projects to between 0% and 5% in Budget 2018.

Its chief executive officer Datuk Ahmad Asri Abdul Hamid said currently, the machinery tax rates varied and could reach up to 20%.

“The move would encourage the use of construction machinery rather than being over-reliance on foreign workforce,” he said when responding to a question on CIDB’s Budget 2018 wish list at a media briefing on the Public Works Department (JKR) Transformation Through Public Projects in Kuala Lumpur on Thursday.

Ahmad Asri said currently, taxes imposed on certain machinery were relatively high compared with that of other Asean countries.

He said the Government should reduce the taxes to allow more companies, particularly small firms, to buy new machines if it wanted to encourage mechanisation and automation of the IBS construction approach.

“Currently, many of them still prefer to buy second-hand machines as these are cheaper, but with lower efficiency and productivity compared with new ones,” he added.

Ahmad Asri also urged the Government to provide funding of about RM500,000 for IBS suppliers to enable more small firms to participate in the industry.

He said as the cost of setting up an IBS plant and acquiring the moulds was expensive, the industry was dominated by big firms.

“With such a scheme, more small firms could set up factories to produce specific components, and they need government financing,” he said.

On Thursday’s event, JKR director-general Datuk Seri Dr Roslan Md Taha expressed confidence that 15 IBS projects would surpass 15 projects, with a total value of RM638 million, recorded last year.

“Eleven IBS projects worth RM360mil have been completed as at June this year. With three months left this year, we are confident we can surpass last year’s figure,” he said.

Roslan said JKR was committed to the ‘Value Gateway’ concept for projects under its supervision to guarantee the highest level of quality of construction for the people.

The ‘Value Gateway’ concept is a construction review process that enhances construction quality and productivity level.

Roslan said three projects valued at RM37.68mil had been completed under the concept since it was adopted in 2011. - Bernama