Sarawak Manufacturers' Association


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Issues Raised at the Economic Council Dialogue

The Economic Council dialogue themed "Towards Sustained Economic Growth to Counter Global Economic Slowdown" was organized by the Economic Planning Unit in the Prime Minister's Dept and the Sarawak State Government on 5 February 2009 in Kuching.

It was chaired by our Chief Minister YAB Pehin Sri Abdul Taib Mahmud. The Minister in the Prime Minister's Dept Tan Sri Amirsham Abdul Aziz was present on behalf of the Federal Government. Tan Sri Amirsham is now the Chairman of National Economic Advisory Council (NEAC).

Sarawak State Secretary, State Financial Secretary, most of the State Cabinet Ministers and heads of depts were also present.

Our Honorary President, Mr Chai Foh Chin raised five issues on behalf of our association as below:-

(1) Schedular Tax Deduction System

The newly implemented Schedular Tax Deduction System effective 1 January 2009 as too comprehensive and not easy to be mastered by the employers.

To simplify the system and to provide training to employers.

The Inland Revenue Board was quick to respond positively by providing training to employers in groups the following weeks as from 9 February 2009. We observe that the Dept is very efficient.

(2) Appeal to Abolish Cabotage Policy

Cabotage Policy has contributed to part of the reason for high cost of transportation to or from Sarawak.

The policy disallows foreign vessels to carry cargo beyond the first port of call in Malaysia. As a result, the imported cargo has to be unloaded at the first Malaysia port of call and transship to another Malaysian vessel for further transport to final destination in Malaysia. Hence higher cost of transportation.

To abolish the above policy which is to protect Malaysian shipping industry since 1980 which is far out-dated. The Malaysian shipping is now in mature stage to compete in the international market and therefore should not be protected at the expense of Malaysian business communities and consumers.

The Gov't has finally agreed to liberalize the Cabotage Policy for Containerized transshipment cargo for the sectors between the Port of Sepangar, Port of Bintulu, Port of Kuching with Port Klang and the Port of Tj Pelepas and vice versa. The liberalization has come into effect on June 3, 2009.

(3) Incentives for Investing in Tourism Attractions

Sarawak is a beautiful state and a state that we all love. Most of the tourism attractions are owned and operated by the Gov't resulting financial burden to the Gov't. Private sector is reluctant to invest in tourism attraction project due to the lack of financial incentives.

To approve financial incentive for private sector investment in the tourism attractions which could be in the form of Pioneer Status or Investment Tax Allowance (ITA).

Our Honorary President Mr Chai Foh Chin was being informed by the senior officer of MIDA from K.L. some weeks later those tourism attractions can now be given Pioneer Status or to enjoy ITA on the condition that the proposed project must first be supported by the Ministry of Tourism.

(4) Financing for Landed Properties with Lease Period about to Expire

Financial institutions are reluctant to extend credit facilities or approve new applications if the borrowers' collateral were landed properties with lease period about to expire.

To appeal to BNM and financial institutions to continue to accept the said properties as collateral. Mr Chai also appealed to YAB Pehin Sri Abdul Taib Mahmud, our Chief Minister and the State Gov't to expedite the processing of the application for the renewal of land lease.

The Chief Minister asked our Mr Chai for any specific case. Mr Chai quoted a row of shophouses at Jalan Padungan required immediate attention. In reply, our Chief Minister who chaired the session said leasehold land at Jalan Padungan would be automatically renewed as they were not gazetted for future government development. YAB's positive remarks received overwhelming response from the floor.

As advised by YAB, Mr Chai wrote to YAB Pehin Sri on 9 February 2009. Two weeks later, all the affected shopowners received letters of approval from the authorities concerned. Mr Chai and all the shopowners were very grateful to YAB Pehin Sri for his prompt action showing his commitment to assist our business community.

(5) Sales Tax Credit

Manufacturers in Sarawak or Malaysia usually pay more Sales Tax as compared to Corporate Income Tax which burden manufacturers.

To appeal for Sales Tax Credit for manufacturers who were in desperate need during the economic slowdown.

No response from the minster concerned but understand that the mount was too large for the Federal Gov't to absorb.

Posted Date: 13 Mar 2010

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