Govt urged to assist SMEs in export market
The SME Association of Malaysia is calling on the government to further assist small-and-medium enterprises (SMEs) in the export business, especially the newcomers.
National President Michael Kang said SMEs needed help as the current economic situation was tough on their cash flow.
Hence, he said immediate action in the form of export grant, trade mission and subsidies on certain costs might support the SMEs financial position.
“With the formation of the Asean Economic Community at year-end, the market will be more competitive. So, we hope SMEs can also obtain visa-free to encourage them to go international,” he said.
Welcoming the exemption of import duty on 90 tariff lines announced by the government yesterday, Kang said the move would help SMEs to price their goods competitively, but the association had yet to know the items listed.
On additional funds for SMEs, namely the Working Capital Guarantee Scheme (RM2bil) and the Domestic Investment Strategic (RM1bil), he said they would lend some support but it might not be felt significantly by some 645,000 SMEs in the country.
“Many SMEs are reeling from poor sales since the Goods and Services Tax (GST) implementation on April 1 as consumers are cautious in their spending.
“In addition, the SMEs have also used up 92%-100% of their loans to sustain their business. We hope the government will relook at GST and reduce electricity tariff to further cushion the impact the sliding ringgit,” he said.
Cut tax rates for better business: Deloitte
The government should lower corporate and personal income tax rates to 20% each to create a more conducive business environment, says Deloitte Tax Services.
Managing Director Yee Wing Peng said, currently, both tax rates remained high at about 25% each, and this was not competitive compared to neighbouring countries.
“To attract more foreign direct investments, we would like to see corporate income tax lowered to 20% in the next three years.
Similarly, personal income tax must be lowered to 20% to attract more overseas talents, as well as retain local talents here,” he said at the Pre-Budget Tax Forum last week.
Yee said the tax reduction should be one of the government’s focus areas during the tabling of the 2016 Budget on Oct 23.
On the weakening ringgit, he expressed optimism on the country’s outlook, saying the current challenges also presented plenty of opportunities especially in boosting exports.
“We also expect the government to come up with incentives to encourage Malaysian companies to export their products and services to neighbouring countries.
China, India propel Asia’s wealth growth
CHINA and India are among the key emerging markets to propel Asia-Pacific’s high net worth individual (HNWI) population and wealth growth in recent years, based on the latest Asia Pacific Wealth Report 2015.
The report released by Capgemini and RBC Wealth Management also stated that Asia Pacific was expected to overtake North America’s US$16.2tril in HNWI wealth by yearend.
In general, Asia Pacific HNWI population has expanded at the rate of 8.5% while wealth increased 11.4% in 2014, leading all regions globally.
“India and China represent nearly 10% of global HNWI wealth, and account for 17% of the global increase in new wealth since 2006, adding US$3.2tril during that time,” the report said.
On the other hand, the population of HNWIs in Malaysia grew by 1.7% in 2014 while wealth grew by 3.7%.
It noted that HNWIs in Malaysia favoured cash over all other investments at 24.9% of their portfolios, higher than the Asia-Pacific (excluding Japan) average of 23.1%. More than half of the Malaysian HNWIs are interested in receiving more social impact advice from their primary wealth manager.
According to the report, Singapore recorded low HNWI growth in population and wealth at 2.2% and 3.9%, respectively.