KUALA LUMPUR: Maybank Investment Bank has urged the government to address the efficiency issue of the Goods and Services Tax (GST) especially for the small and medium enterprises (SME).
SMEs, Maybank IB said, are facing cash flow issue from having to pay GST on schedule to avoid penalties but facing delays in the input tax refunds.
“This can hurt the real economy, for example by curbing business spending,” it said, referring to the slowdown in private sector investment growth in the second quarter to 3.9 per cent from 11.7 per cent in the first quarter.
Maybank IB economists were among economists from major local and foreign banks, government-linked investment funds, local economic think tank who attended Prime Minister Datuk Seri Najib Razak’s briefing here on Thursday.
“Tourism should be promoted further as it contributes to a sizeable 13 per cent of the economy, and not just inbound tourism in view of the current ringgit level but also domestic tourism as alternative to the costlier overseas holidays.”
On the 1MDB issue, the bank suggested a steady information flow on progress of restructuring would be welcomed, starting with the overdue latest audited financial statement.
“From the meeting, we gathered that the restructuring of 1MDB’s power business will be via bidding process and no one will be forced to do “national service”.”
The research firm said while the interests on the real estate side of 1MDB is strong, it is even more so now with the ringgit level which is attractive for foreign investors.
In addition, the assessment of the international rating agencies is that any gap between 1MDB’s assets and liabilities of up to RM10 billion is considered as “acceptable”.
On the briefing, it said Najib’s remark should put to rest to worries on the pegging of the ringgit.
It also lends credence to the remarks by the Second Finance Minister and Bank Negara Malaysia governor that there was no intention to peg the ringgit and impose capital controls.