KUCHING: The federal government has been asked to introduce a double tax deduction on freight charges for three business categories in the state.
Industrial Development Minister Datuk Amar Awang Tengah Ali Hasan said the double deductions should cover the exports of products for all industries to Peninsular Malaysia and Sabah; imports of raw materials from Peninsular Malaysia for manufacturing of products specifically for export; and transportation costs within the state.
He said double tax deductions would enable local businesses to compete on a more level playing field as their counterparts in the peninsula and make the state more competitive.
“While the state is blessed with many natural resources, it is still comparatively lagging behind Peninsular Malaysia in terms of infrastructure and communications network. Due to poor road networks and the fact that Sarawak is separated by the South China Sea from Peninsular Malaysia, the local business communities have to incur higher cost in transporting their goods within the state and to Peninsular Malaysia as well as overseas via Port Klang.
“As such, MID (Ministry of Industrial Development), has sought the assistance of the federal government to look into this issue and to provide additional tax incentives to the local business community to reduce the cost of doing business as well as reduce the cost of living,” Awang Tengah said when officiating at a briefing and consultation and Go-Export programme yesterday.
Among those present at the event organised by the Malaysia External Trade Development Corporation (Matrade) were Deputy Minister of International Trade and Industry Datuk Hamim Samuri, and Assistant Ministers of Industrial Development Datuk Peter Nansian (Industrial Estate Development) as well as Julaihi Narawi (Investment and Promotion).
Awang Tengah noted that small and medium enterprises (SMEs) made up 97 per cent of the state’s business community, contributing significantly to the economy of the state and country.
Among the state’s efforts to help local SMEs included RM2.9 billion to develop 7,200ha of industrial estates.
However, he pointed out that the state government could not set up industrial estates in all major towns due to Sarawak’s size.
“As such, we (state government) would like to seek continuous support from the federal government, through Miti (Ministry of International Trade and Industry), to provide the necessary allocation for us to develop more industrial estates,” he said.
Awang Tengah also called on the federal government to provide more funding for infrastructure as well as financial assistance and incentives for local entrepreneurs to propel the state towards an industrialised economy in tandem with the national vision of achieving a high income economy by 2020.
Meanwhile, Hamim told a press conference later that he would bring up the state’s request for double tax deductions for discussion at federal level.