KUALA LUMPUR: The Federation of Malaysian Manufacturers (FMM) in congratulating the government on tabling a comprehensive and pragmatic mid-term review plan last week, hopes that proposals to increase government revenue as part of fiscal consolidation would not lead to additional and unnecessary regulatory burden to the manufacturing sector.
“The priority should be to support and promote expansion of the economic pie to enable the reaping of higher returns to enhance business sustainability, and more importantly, medium and long-term growth,” it said in a statement today.
FMM cited existing tax incentives, such as the reinvestment allowance, accelerated capital allowance, double deduction incentives for research and development, export growth, enhancements to facilitate and spur the manufacturing sector to quickly undertake upgrading, expansion and diversification activities, including investing in Industry 4.0 technologies and innovation to achieve higher productivity and value-add.
The organisation also looks forward to close consultation with the government on its progressive and comprehensive multi-tiered levy system mechanisms to empower human capital development.
“We hope to see critical market-based levers namely, simple and transparent criteria; planned and pre-announced changes, especially in levy rates; removal of discretionary approvals, bureaucracy inconsistencies in policy implementation as well as rent seeking activities; and incentives to reward businesses which have reduced their dependence on foreign workers and unskilled labour. Levy collected should also be ploughed back to help finance industry’s investments in automation and productivity enhancements,” FMM said.
Overall, FMM looks forward to close and regular engagement with the government on the relevant programmes and initiatives under the 19 priority areas and 66 strategies of the six policy pillars. We are optimistic that these economic targets and aspirations would be executed and achievable through close collaboration and consultation between the government and the business sector, in particular the manufacturing sector for better fit of policies in meeting the challenging demands of competition and technological advancements.
Commenting on the government’s target of 4.5-5.5% gross domestic product growth over the 2018-2020 period, FMM said it was most reassured that the government is steadfast in pursuing growth targets despite the impact of fiscal and governance reforms on short-term economic growth.
FMM reiterated its commitment to working closely with the government in helping to meet the economic targets.