PETALING JAYA: Soothing news on loan moratoriums as well as lower taxes and measures to reduce the cost of living are being eagerly waited by the business community in the Budget 2023 announcement.
Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said the initiatives should focus on strengthening the competitiveness of the business sector, particularly small and medium enterprises (SMEs).
FMM has submitted two suggestions on corporate tax reduction and the establishment of National Apprenticeship and Automation Funds.
Soh said it proposed a more competitive tax regime by gradually bringing down the corporate tax rate to 20% while the corporate tax rate for SMEs was suggested to be lowered to between 13% and 15% for the next two years.
“Or alternatively consider a flat corporate tax rate at 17% for all SMEs which meet the national SME definition.
“Reduce corporate tax rate by between 1% and 5% for companies that are able to localise their content from 30% onwards and gradually bring down personal tax rates to increase disposable income and encourage greater consumption.
“A restructuring of personal income tax bands can also be done so that taxpayers will not hit higher tax rates too quickly,” he said.
Federation of Malaysian Consumers Associations (Fomca) said the government’s top priority in Budget 2023 should be to facilitate rapid economic recovery and secure job creation.
Its chief executive officer, Saravanan Thambirajah, said Fomca wanted the Budget 2023 proposals to address income inequality, increasing cost of living and consumer empowerment.
“The most serious issues consumers face as workers are unemployment and reduction in income; thus the government should ensure job creation to accommodate those who have lost their jobs as well as those who are joining the labour market for the first time,” he said.
Saravanan said the government should provide direct financial assistance to individuals who have lost their jobs and who are struggling to find new employment so that they can maintain a basic standard of living.
“We strongly believe that the public healthcare system is also underfunded, leading to long delays for non-Covid-19-based treatment, unavailability of beds for serious cases, lengthy waits to see specialists, and a lack of facilities in smaller towns,” he added.
The Malay Economic Action Council (MTEM) urged the government to provide an interest-free debt moratorium on all types of loans, including credit, except for credit card debt from Oct 1, 2022 to Dec 31, 2022.
“This is if the total amount of principal debt is not more than RM1mil, including those with arrears exceeding 180 days,” said its chairman Dr Abdul Halim Husin.
MTEM also suggested that the government reduce employers’ contribution rate to the Employees Provident Fund (EPF) from January 2023 to December 2023 as a preparation to face an economic recession, which is expected to worsen next year.
Abdul Halim said despite realising that the move would reduce the employees’ EPF contribution savings, consideration should be made for the “survival” of the employment sector and to reduce the number of unemployment.
“That’s why we are calling for a reduction in the EPF throughout 2023 only.
“This proposal takes into account cash flow in the future because in 2023 we expect there will be a great challenge to jobs and many businesses will fold,” he said.
Malaysian Automotive Association (MAA) president Datuk Aishah Ahmad said the body had requested for the import and excise duties exemption on electric vehicles to be extended by another 10 years.
The exemption was first announced on Oct 29 last year as part of Budget 2022.
