On top of the measures rolled out by the government under the short-term Economic Recovery Plan (Penjana), there are calls for additional impetus to spur the rebooting of the economy.
Further measures needed to help lift economy
PETALING JAYA: On top of the measures rolled out by the government under the short-term Economic Recovery Plan (Penjana), there are calls for additional impetus to spur the rebooting of the economy.
These include the waiver of Withholding Tax (WHT) for payments to non-residents, exemption or reduction of sales and service tax (SST), goods and services tax (GST) refund, suspension of suits by the Inland Revenue Board (IRB), and deferment of Employees Provident Fund (EPF) contributions.
“Non-residents play a pivotal role in our economy. To impose WHT would dampen the spirit of doing business here as many prefer to operate in countries that don’t,” McMillan Woods president Datuk Seri Raymond Liew told SunBiz yesterday.
“The government can consider doing away with WHT until end of 2021 to spike up economy activities with the promotion of domestic growth.”
Liew suggested that the SST of 6% be waived for all sectors to bring prices down to a more manageable level and increase domestic activities.
He pointed out that it has been two years since GST regime was replaced with SST and yet many business owners are still owed their GST refunds.
“These refunds need to be returned to the SMEs quickly to help them with the current severe cash flow situation. If GST audit is to be performed, do it speedily or refund the overpaid GST and carry out the GST audit at a later date.”
It would benefit the overall spirit of reviving the ailing businesses by SMEs if the IRB suspends its suits especially on non-payment of old taxes and waiver of penalties, he added.
“The deferment of EPF contributions until the end of 2020 would give the SMEs a breather bearing in mind that the moratorium loan period and the EPF deferment programme expire in October,” Liew said.
Former chief investment officer Pankaj Kumar echoed the sentiment, saying an expedition of the GST refund process will help SMEs keep their heads above water.
“One way the government can help for SMEs to mitigate the impact from the cashflow strain for their EPF contributions is to provide six-month soft loans with zero interest via SME Bank to those that need funding for the purposes of employer’s EPF contributions,“ he added.
Meanwhile, he commended the government for being proactive in trying to address some of the shortcomings and providing assistance to SMEs.
“The request for tax measures, which among others include the freeze in withholding tax and exemption and reduction in service tax can have detrimental impact on the nation’s tax revenue as this would lead to wider deficit for the country,” he said.
The Sun Daily, 9 June 2020 (Tuesday)