Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on May 6, 2019 - May 12, 2019

On May 9, 2018, Malaysians voted for one thing: Change.

Much of the focus thus far has been on corruption and while we applaud the government for this, we must not forget that it is business as usual for Corporate Malaysia.

One year on, people are still anxious. The economy must get stronger. Investors must return. Jobs must come back. The ringgit must appreciate. The cost of living must come down. People must have more cash in their hands. These are the things that people in all countries want. It is a tremendous responsibility for any government, let alone Malaysia where after 60 years, almost everything has to be revamped.

 

Critical challenges

The rising cost of doing business in Malaysia is outpacing revenue growth due to the divergence of policies across ministries.

Our aim is to grow and expand our business in Malaysia, to look after our stakeholders and our employees. We have always worked, and will continue to work, with the ruling government. On the business front, things are moving, but at an extremely slow pace. Local businesses are bleeding millions each month. There is a real emergency to fix this, and we need immediate action.

 

Engaging the top guns

Accessibility to engage, meet and dialogue with our ministers and top government officials in charge of policy change can be improved. The private sector can help the government here — we genuinely can. We have many ideas that we can share to build this nation. We are trying to engage the ministers and top government officials. Some are willing but many are not.

 

‘Buy Malaysian’ policy

Prime Minister Tun Dr Mahathir Mohamad has always advocated “Buy Malaysian” and government policies need to be changed and streamlined immediately across ministries to make this a success. Action has to be swift and immediate. Malaysia must protect its own industries from the unfair trade practices of other countries, so these industries can grow and develop further.

We want the government to level the playing field and prevent local steel manufacturers from being permanently injured by dumping caused by steel trade diversion through our Asean neighbours. We are not reinventing the wheel but just executing what the US and EU have done to prevent their domestic industries from bleeding. Our present system is open to biased decisions, manipulation and circumvention, promoting steel imports instead of Malaysian-made steel.

 

Taxation

The problem with GST or SST is that these are taxes on consumption. For people who pay income tax, these taxes are on income that has already been taxed. Consumption taxes are a double tax for the people, and such taxes can be very unpopular. Another form of tax is income tax, which for corporations is currently at 24% in Malaysia. This level of tax is reasonable but still high compared with Singapore’s 17% and Hong Kong’s 16.5%.

The government should pay attention to transaction taxes. Stamp duty is a form of transaction tax. What I am proposing is that the government considers stamp duties on banking transactions. Even a stamp duty of 0.01% on all banking transactions above a minimal threshold — say RM500 so that the general public can avoid such duties — will generate substantial revenue for the country.

In this system, there will be no leakage or cost of collecting the duties as they will be undertaken by banks at source, at the time of the transaction. After all, banks are charging their clients fees for banking transactions, so shouldn’t the government share that too? What appear to be small and insignificant transaction taxes will accumulate to become massive revenue for the government. Malaysian’s M0 money supply is RM94 trillion. If that money changes hands every month through banking transactions, the total national bank transaction volume will be RM1,128 trillion a year (RM94 trillion times 12 months). At 0.01% stamp duty, the government’s revenue will be RM113 billion a year.

 

Education

Our current education system (stemming from past blueprints) has severely set our children behind those of our neighbours. We have heard that Malaysia has been suffering from brain drain for years. The good, talented and intelligent people have long left. They refused to return then and they refuse to return now. New Malaysia has attracted some but many are still planning to leave. We have to ask ourselves why this phenomenon has not changed and what it will take to reverse the situation. There were plans by the previous government to engage the private sector and I did offer my time but, sadly, this plan did not materialise.

 

Discrimination, racism and sensitivities

The current climate of spreading hate, which breeds violence, needs to be severely dealt with using tougher laws. There should be zero tolerance. Every day, we read about trouble brewing somewhere, someplace. We see on social media rogue groups taking matters into their hands, creating disharmony. Investors will not return to this country if its people are continuously fighting among themselves.

 

Safety and security

The streets are no longer safe; children can no longer go out and play. The police hardly patrol the streets. Everyone we know of have either had their houses broken into, been victims of snatch thieves or experienced some form of violence. This is why many neighbourhoods have taken matters into their own hands, hiring security guards to protect their homes. They pay for their own safety, above and beyond paying their taxes.


Tunku Datuk Yaacob Khyra is executive chairman of Mycron Steel Bhd

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