OPR reduction helps to lower business costs — ACCCIM

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BNM would likely maintain the OPR for now, after unexpectedly reducing it at its Monetary Policy Committee meeting, citing rising risks from Britain’s exit from the European Union. — AFP photo

BNM would likely maintain the OPR for now, after unexpectedly reducing it at its Monetary Policy Committee meeting, citing rising risks from Britain’s exit from the European Union. — AFP photo

KUALA LUMPUR: The 25 basis points reduction in the Overnight Policy Rate (OPR) to three per cent by Bank Negara Malaysia (BNM) will help ease the cost of doing business and benefit consumers, the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) said.

ACCCIM president Datuk Ter Leong Yap said the OPR reduction is a measure of strategy by BNM to stimulate the market.

“To a certain degree, this will ease a little bit the cost of doing business and it will also be good for consumers as they will have extra buying power.

“However, this might put pressure on our ringgit,” he told reporters after revealing the findings of the ACCCIM SME Taxation Survey Report 2016 yesterday.

When asked about the possibility of another rate cut in September, Ter said BNM would likely maintain the OPR for now, after unexpectedly reducing it at its Monetary Policy Committee meeting, citing rising risks from Britain’s exit from the European Union.

Meanwhile, Ter said the ACCCIM SME Taxation Survey Report 2016 highlighted that 80 per cent of the respondents indicated that the Goods and Services Tax (GST) had increased their operational costs.

“The additional costs included the purchase of GST software and employment of additional staff.

“Therefore, we hope the government will utilise the GST revenue wisely and create a conducive business environment,” he said.

ACCCIM also hoped the government would lower the corporate tax rate to 18 per cent and reduce the SME threshold taxable income to 15 per cent for the first RM2 million.

The association also urged the government to lower the individual income tax rate to 18 per cent for the highest chargeable income bracket from 28 per cent.

“By doing so, we will be able to enhance our competitiveness in order to attract more foreign direct investments, as well as boost the taxpayers discretionary spending into the market place.

“This will increase the multiplier effects and bring back vibrancy into the economy,” he added. — Bernama