SME Budget 2014 wish list: GST, income tax & more

Published: Wednesday September 4, 2013 MYT 6:08:00 PM
Updated: Wednesday September 4, 2013 MYT 6:18:01 PM
SME Budget 2014 wish list: GST, income tax & more

KUALA LUMPUR: The Government should clarify in the upcoming budget when the Goods and Services Tax will be implemented to end uncertainties in the market, said tax consultant Lam Kwai Soon of accountancy firm, Cheng & Co.

According to Lam, a proper outline would help to avoid speculations, including questions on whether the income tax rates would be reduced after the GST’s implementation, and by how much.

“All this has created a lot of uncertainty and rumours in the market,” he said as he outlined some of the things that small and medium enterprises hoped to see included in this year’s budget presentation.

With clear timelines, businesses would be able to prepare and this would be good for long-term development, Lam stated.

He said a reduction in the corporate income tax rate would also be welcome.

“The government should also adopt more lenient approaches in terms of tax deductions or capital allowances on certain costs such as renovations or office costs, or professional fees in obtaining finance,” Lam added.

He lauded the SME Master Plan 2012-2020 launched last year, saying it was a good plan because it accurately identified the challenges of the SMEs (including innovation and technology, human capital, access to financing, regulatory environment), and established goals and targets.

“The impact and outcome of the initiatives are yet to be known, but the implementation stage is crucial for success,” he said.

Lam said other areas of concern regarding the economy included the drop in consumer confidence index, inflationary pressures and the budget deficit, with Malaysia’s debt levels almost hitting the ceiling of 55% of GDP.

“The Government should not just focus on widening its income base, such as implementing GST; there must be a look into cost controls. It is also important that the efficiency and effectiveness of our government organisation are enhanced and improved.

“Only then do I think the deficit can be reduced,” he stressed.

Lam said following the 13th General Election, political uncertainty had been dispelled and the Government could continue its efforts towards making Malaysia a high-income nation.

However, he said, the Government should also look at the equitability in the distribution of wealth in the country.

“It will be more meaningful if we can achieve the vision of a high-income nation, and at the same time ensure that a great number of people can enjoy the distribution of wealth more equally,” he said.