KUALA LUMPUR (Nov 2): Calling Budget 2019 an "excellent maiden budget" by the new Government, the Federation of Malaysian Manufacturers (FMM) said it is comprehensive, inclusive and would reset the economy to a firm and robust footing that will pave the way for future growth.
"Despite the difficult financial position, it is heartening that the Government has managed to maintain development expenditure to foster growth.
"In addition, sufficient grants and incentives have also been provided, mainly towards the adoption of new technologies of Industry 4.0, human capital development, promoting entrepreneurship, innovation and R&D (research and development), all of which are essential to achieve our ambition of a high-income country," said FMM president Datuk Soh Thian Lai.
FMM is also supportive of the Government’s continuous commitment towards strengthening institutions, improving governance and minimising corruption. "Zero-based budgeting is a step in the right direction towards prudent fiscal management. We also look forward to the implementation of the Fiscal Responsibility Act and Government Procurement Act, which would greatly enhance the confidence of investors," said Soh.
Soh also highlighted that the federation's wishlist has been "fulfilled", and thanked the Government for heeding FMM's calls and taking up its proposals in several areas, including the provision of service tax relief on taxable services to manufacturers, and introducing a credit system for small companies to obtain inputs from non-registered businesses. "FMM would appreciate if more details on the credit system mechanism [are made available] as this could help reduce double taxation," he said.
Among the other areas are: the 1% reduction in corporate tax for SMIs from 18% to 17%, which Soh said would also help mitigate rising costs of doing business, and the Government's move to evaluate and redefine its role in business to remove crowding out and allow the private sector to lead and grow the economy.
In particular, FMM is also pleased that Putrajaya has heeded its call to promote buy made in Malaysia products or 'Buy Malaysian First' and allocated RM20 million to kick start the promotion campaign to support local products and services, which it said is the "first time" this has been done.
The formation of a task force to drive regulatory reforms to ensure a more business-friendly environment through improved business processes and tax administration was also commended, besides efforts to ensure more affordable fixed broadband through the National Fibre Connectivity Plan, which is expected to cut prices by at least 25%.
"FMM hopes to receive confirmation that the price reduction is also applicable to businesses and should give priority towards better connectivity in industrial estates," said Soh.
Last but not least is the Government's move to extend the Green Technology Financing Scheme for another five years through an allocation of RM2 billion, which would encourage industries to step up investments in energy efficiency, renewable energy and waste minimisation initiatives.
As for the conversion of Pulau Indah into a Free Trade Zone, Soh said the move is welcomed as it would lead to increased development of export-oriented activities, as well as job creation and real estate development around the port area.