KUALA LUMPUR: While businesses can plan for known costs, the element of uncertainty is far harder to manage, says Malaysian International Chamber of Commerce and Industry (MICCI) president Christina Tee.
In a statement, the MICCI urged the government to use Budget 2027 to reduce the cost and uncertainty of doing business, as companies contend with rising compliance, utility and operating expenses, tighter cash flow and greater complexity arising from the expanded Sales and Service Tax (SST).
“Clear timelines, reasons for decisions and prompt settlement of money already due are basic conditions for an efficient business environment. Budget 2027 should turn these into practical, measurable standards," said Tee.
On tax, MICCI warned that the expanded SST may increase compliance complexity and create cascading effects across supply chains.
It urged the government to consider reintroducing the Goods and Services Tax (GST) at an appropriate time, taking prevailing economic and business conditions into account.
As a broader and more efficient consumption tax system, GST allows businesses to claim input tax credits, reduce cascading, improve transparency and compliance, and provide a more sustainable revenue base than SST.
MICCI also called for pragmatic measures to address illicit trade in alcohol and tobacco, which is estimated to result in approximately RM5.6bil in annual revenue losses for the Government.
"We acknowledge that the government has been stepping up enforcement against illicit trade, and urge that any measures introduced be effective in reducing these losses without further burdening legitimate industry."
It said proposed measures should be backed by a proven track record or statistics and carefully considered to avoid unintended consequences, such as widening the price gap between legitimate and illicit products.
It added that consumer sentiment has weakened particularly following the excise increase last year, and any further increase in costs or excise duty will fuel demand for illicit products.
MICCI also proposes clear Service Level Agreements for government agencies, with defined processing timelines for applications, approvals and submissions.
Rejections should include a reason or justification so businesses can understand and address the issue.
To ease cash-flow pressure, MICCI proposes automatically offsetting tax refunds against current tax instalments, accelerating government payment cycles and encouraging prompt-payment practices across the public and private sectors.
Businesses should not have to fund current obligations while refunds or payments already due remain outstanding.
For diesel-reliant businesses, MICCI called for continued review and improvement of the Subsidised Diesel Control System (SKDS), particularly vehicle-level quota management, based on feedback from industry and relevant stakeholders.
Greater clarity and flexibility in quota allocations would help ensure that allocations better reflect actual operational requirements and avoid unnecessary pressure on business costs and continuity.
