KUALA LUMPUR, August 17 — Datuk Seri Mohamad Hasan has today suggested for the federal government to consider a temporary corporate tax cut for small and medium-sized enterprises (SME) in order to expedite the growth of private sector investments and boost the country’s economy.
Mohamad said the government must practice moderation and wisdom in balancing its agenda of containing the spread of Covid-19 and economic restoration efforts, adding that existing mitigation efforts must not be too rigid to the extent of impeding the process of economic restoration.
“This step is important to hasten the growth of private sector investments. Existing weak sentiments on investment will hamper business expansion potentials and impede the creation of new job opportunities,” he said in a statement here.
He was earlier responding to Bank Negara Malaysia (BNM) remark on Malaysia’s gross domestic product (GDP) contracting by 17.1 per cent in the second quarter of 2020 mainly due to the movement control order (MCO) enforced during the quarter to stem the spread of Covid-19.
He also said a one-off special individual tax relief for taxpayers with middle and low-income could also be considered to ease the burden on the people that were affected mostly.
To make up for reduced tax revenue, Mohamad said the government could study the implementation of wealth tax and inheritance tax to ensure the nation’s source of income and financial stability while overcoming the wealth gap problem simultaneously.
The former Negri Sembilan mentri besar also urged the government to consider reopening the country’s border in stages and in an orderly manner, adding that the move will facilitate trade between countries involved to create an economic overflow in various sub-sectors.
“The reopening of the country’s border will propel economic activities, ease the movement of labours and help in unemployment.
“The local industries, particularly the tourism and higher education sector cannot sustain with the support of just the domestic markets. The resumption of cross-border economic activities is an important strategy to increase demand and production,” he said.
He also called for Asean member states to enhance regional economic cooperation in order to drive economic recovery together and reduce trade restrictions imposed during the Covid-19 pandemic.
“All of these measures to restart the economy coupled with the effectiveness of economic stimulus will be key in ensuring Malaysia’s economy recovers as quickly as possible,” he said.