The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) concurs with Mr Lee Heng Guie, Executive Director of the Socio-
Economic Research Centre (SERC) of ACCCIM’s assessment that the likely
implementation of the Inheritance Tax and Capital Gains Tax to increase
government’s revenue have more drawbacks than benefits. These taxes would cause capital outflows while stifling the Malaysian entrepreneurs’ spirit of creating wealth and corporate elites’ desire to innovate and prosper.

ACCCIM strongly oppose the imposition of the Inheritance Tax and Capital Gains Tax. In our opinion, these taxes would dampen economic growth in many ways: stifle the growth expansion of SMEs and family business; discourage capital formation and savings as well as induce corporates and investors to move their assets and investments abroad. As in the case of Capital Gains Tax, it increases the marginal cost of investing in Malaysia as foreign investors already marginalized Malaysia equities. Overall, these taxes will result in subdued market environment, which is deemed not conducive to attract the inflows of private capital and FDI that are needed to drive Malaysia’s economic growth and capital market development.

On the 2019 Budget, ACCCIM have submitted the following proposals, which
amongst others include the staggered reduction in the corporate income tax rate to 18% and also lower the tax rate for SMEs to 15% for the first RM2 million chargeable income. In addition, we also urge the Government to consider raising the personal tax relief for individuals to RM10,000 from RM9,000; ease the burden of low and middle-income households through the lowering of personal income tax rate as well as enhance the competitiveness of all economic sectors and stimulate domestic consumer spending.

ACCCIM is of the view that the Government must continue to create and
enhance a business-friendly environment to support domestic businesses and attract foreign investment. We believe that it is through enhancing corporates’ competitiveness, flourishing their growth and profits, more revenue will be collected by the Government instead of widening the tax base or increase any tax rate to increase the government revenue. We view this as a long-term strategic policy to create a win-win situation for both the Government and private sectors.