KUALA LUMPUR, Sept 2 (Bernama) -- The Federation of Malaysian Manufacturers (FMM) has urged the government to consider reducing the corporate tax in the upcoming Budget 2025 to maintain Malaysia’s competitiveness in attracting foreign investments.
FMM president Tan Sri Soh Thian Lai said its members also hope the government will expand tax incentives to stimulate growth, particularly in key sectors like technology, manufacturing, and green energy, to align with global trends in driving innovation and economic diversification.
“We suggest that the government introduce a double tax reduction for any investment in green initiatives and environmental, social, and governance (ESG) projects,” Soh said at the FMM Business Conditions Survey for the first half of 2024 here, today.
“It will also be beneficial if the government can set up an ESG fund worth RM2 billion to support the growth of small and medium enterprises (SMEs) in this area,” he said.
On talent development, Soh emphasised the importance of reducing reliance on foreign expertise and enhancing competitiveness in high-tech industries through more upskilling and reskilling programmes.
Additionally, some FMM members also support the reintroduction of the goods and services tax (GST) at a lower rate, which could help broaden Malaysia’s tax base without overburdening consumers.
“This move could provide a more stable revenue stream for the government while minimising inflationary pressures,” he noted.
Soh also expressed hope that the government would consider implementing the Government Procurement Act soon, pointing out that 88 per cent of its members are currently not supplying to the government.
“We believe that the government should introduce this act because the government’s procurement sector is one of the largest in the country,” he said.
The main recommendation to improve the system includes the introduction of a unified procurement policy with enforcement and transparent measures; advocating a database of local manufacturers; and the proposal to use an e-procurement platform to increase transparency, standardise processes and make government contracts more accessible to a broader range of businesses, he added.
-- BERNAMA
