KUALA LUMPUR: The revised 2023 Budget should benefit more small and medium enterprises, especially in terms of corporate tax reduction, said the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
In the last budget before the 15th General Election, the corporate tax was reduced to 20 per cent but the coverage was only for the first RM100,000.
"Just a RM2,000 saving will help, so what we want is to actually increase the threshold, expand it to RM1 million, before reducing the tax rate from 17 per cent to 15 per cent as we believe this will help SMEs," said ACCCIM president Tan Sri Low Kian Chuan.
One of the most important things, he said, was to help SMEs mitigate the cost of doing business and this would eventually help restore investor confidence.
Low said it was crucial for the government to restore investor confidence, which was dampened by political uncertainty, in order to attract more foreign direct investments (FDI) as well as domestic direct investments (DDI).
"Maintaining investors is very crucial, so that we can go for higher and more capital intensive investment, then we can attract more foreign and local investors," he told the media at a presentation on ACCIM's Business and Economic Conditions Survey (M-BECS).
M-BECS is a key market barometer measuring the business community's sentiments and expectations of their business prospects and economic outlook.
The survey, which was conducted between Nov 15 2022 and Jan 31 2023, covers July-December 2022 (2H 2022) and expectations for January-June 2023 (1H 2023).
According to the survey, the respondents maintained their cautious optimism about domestic economic prospects in the face of a deceleration in global growth amid fears of a recession.
While China's reopening has eased the global recession risk, high inflation and the lagged impact of continued increases in interest rates in advanced economies will weigh on consumer spending and business activities.
The reopening is expected to revive the tourism industry between Malaysia and China, with the government targeting five million tourists from China as Malaysia is one of the six Asean countries on its priority list.
"China has been our largest trading partners for 14 consecutive years, so Malaysia has a strategic partnership with China in terms of trading and many other collaborations.
"The Tourism Ministry is expecting five million tourists from China, so we need to implement certain things to facilitate this, such as increasing number of flights on both sides", Low said.
The survey also showed that while the economic recovery remained on track in 2022, lingering external uncertainties had caused businesses' cautiousness ahead.
The survey indicated that 24.8 per cent of total respondents had expected worse economic conditions in the second half of 2022.