The American Malaysian Chamber of Commerce (Amcham) has urged the government to reduce corporate taxes on a tiered basis to be more in line with other countries.
The present rate of 25 percent should be cut to 18 percent by 2012, it said in a memorandum submitted to the International Trade and Industry Ministry at its annual dialogue 2009 here on Thursday.
Malaysia’s high corporate tax rate caused firms in Malaysia to continue to have high operating costs, it said.
It said Singapore recently reduced its tax rate from 18 percent to 17 percent.
“This huge differential in tax rates could seriously impact on current investors in Malaysia who want to re-invest here, and could deter new foreign direct investments from entering the country,” said the association.
Amcham also suggested for the exemption of import duties to bring down the cost of doing business in the food and beverage franchise industry and menu prices.
Meanwhile, the European Union-Malaysia Chamber of Commerce and Industry (EU-MCCI) called for the introduction of procedure to claim the balance of levies imposed on foreign workers when they are repatriated during the economic downturn.
Presently, employers were unable to make claims due to the lack of clarity on the process, it said.
On the recent introduction of double levy on foreign workers, EU-MCCI said that this could penalise many manufacturing companies as the increase would impact heavily on their operating costs.
“We fully understand the government’s intention to employ Malaysians particularly at this time of a downturn in market conditions.
“However, we wish to recommend that the levy be reviewed such that there is a sliding scale over a period of time, that in certain sectors a more flexible approach is taken and that there should be a review of this policy each year to determine its effectiveness,” it said.