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01
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AdvisersAdvisers
Tan Sri Dato’ Soong Siew Hoong
Datuk David Chua
ChairmanDato’ Low Kian Chuan
Deputy ChairmanDato’ Teo Chiang Kok
Chief EditoChief Editor Ong Kim Seng
Deputy Chief EditoDeputy Chief EditorChow Mun Seong
Executive EditorSeow Mei Yin
Assistant EditorsChristine PooPoh Wan Kh’ngMok Chiau Yen
Tan Ai Joo
Cover design and Artwork :Lin Graphic17B, Jalan SR 3/2, Taman Serdang Raya, 43300 Seri Kembangan, Selangor.Tel: 603-8945 3933 Fax: 603-8945 2933
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Editorial and Publication Committee
2013 12 (December 2013)Issue No: 6/2013
KDN: PP8722/12/2012(031293)THE ASSOCIATED CHINESE CHAMBERS OF
COMMERCE AND INDUSTRY OF MALAYSIA
Published by
马来西亚中华总商会THE ASSOCIATED CHINESE CHAMBERS OF COMMERCE AND INDUSTRY OF MALAYSIA6th Floor, Wisma Chinese Chamber, 258, Jalan Ampang, 50450 Kuala Lumpur, Malaysia. Tel: 603-4260 3090/3091/3092/3093/ 3094/3095Fax: 603-4260 3080E-mail: [email protected] Homepage: www.acccim.org.my
Contents
Bulletin 第88期 Issue No.88
The 14th Malaysia-Taiwan Joint Economic Conference
2nd Forum on Retired Executives & Professionals -Tapping Opportunities
Glorious Retirement of Mr. Ong Kim Seng as Executive Director of ACCCIM
Congratulation
Farewell Dinner to H.E. Datuk Chai Xi, Ambassador of People’s Republic of China to Malaysia
Visit by Delegation of Kenya Government
Visit by Delegation from Leshan City, Sichuan
Province, China
Visit by Delegation of Federation of Filipino- Chinese Chambers of Commerce & Industry, Inc
Visit by Delegation of Edo State Government of Nigeria
Visit by Delegation of Investment Promotion Division of Anshan Municipal Bureau of Foreign Trade and Economic Cooperation, Liaoning Province, China
Notes by Chairman of the Editorial and Publication Committee
New Year Message by Dato’ Lim Kok Cheong, President of ACCCIM
Special Features
Tax Implications of the 2014 National Budget at a Glance
How GST Works?
ACCCIM Activities
Appointment of President of ACCCIM as Member of National Unity Consultative Council and Establishment of ACCCIM National Unity Committee
ACCCIM Meeting with Y.B. Minister of Urban Wellbeing Housing and Local Government
Courtesy Call on Y.A.A. Tun Arifi n bin
Zakaria, Chief Justice of Malaysia
Seminar on Human Resources
Roundtable on Trans-Pacifi c Partnership Agreement (TPPA)
2014
3
Dato’ Low Kian Chuan
Our Government has successively implemented various orders and policies relating to human resources, including
Minimum Wages Order, extension of the retirement age, foreign workers and etc., whereby the business community at large has since been immensely impacted. Generally, human resources play an integral role in supporting the growth of a business enterprise. An effective human resource management will propel resilient business community growth.
It essentially explicates the rationale of Government’s constant reforms on existing p o l i c i e s t o a c c o m m o d a t e t h e n a t i o n ’ s ever-changing environment. Regrettably, prior to implementation of the aforementioned policies, the Government did not adequately consult the stakeholders in the business community. The lack of clear guidelines and fl ip-fl op of the policy changes have not only undermined the Government’s credibility but also inflicted a heavy toll on the business growth nationwide. The Ministry of Human Resources squared up to the minimum wage issues by co-organising a seminar in tandem with ACCCIM. To further ensure public concerns are better heard, YB Minister has agreed to invite ACCCIM to be a member of the National Wage Consultative Council besides being represented in the Technical Committee.
On the other hand, the Government’s announcement of a 15% hike in electricity tariffs effective from 1st January 2014, is expected to trigger a chain reactions. The inflation rate is estimated to increase by approximately 1% to 3% and this will further burden the rakyat’s soaring cost of living. For fear that the business community may ill-afford the sudden spike in both the labour and operating cost, ACCCIM urges the Government to consult the business community in formulating mitigating measures to minimize the impacts. The Government should
develop a special programme to alleviate the impact of minimum wage policy and electricity tariff hike, especially for the labour-intensive manufacturing and services industries. The global competitiveness of some traditional manufacturers has drastically dropped over the years. As such, a reassessment on the key indicators related to productivity, creativity and innovation is imperative in the coming year.
There have been a lot of discussions and arguments over the Trans-Pacific Partnership Agreement (TPPA). The business community has scanty knowledge of details being negotiated. The ACCCIM Legal Affairs Committee, in collaboration with the Kuala Lumpur Regional Centre for Arbitration (KLRCA) invited international trade law experts to impart relevant expertise in a form of roundtable discussion which was well received with numerous feedbacks. We trust that the Government would strive on the basis that the pros outweigh its cons for the country and ensure the Agreement will be conducive to market expansion of the Malaysian business community besides attracting further significant foreign direct investments. ACCCIM has consolidated all relevant views and recommendations in a memorandum and submitted to YAB Prime Minister of Malaysia and Minister of MITI for consideration.
In addition, ACCCIM has also invited tax experts to write articles about the impending GST enforcement as well as the extracts of implementing the National Budget 2014 with reference to the Finance Bill 2014 proposed by the Ministry of Finance.
Last but not least, on behalf of ACCCIM I earnestly wish all members of our Constituent Chambers and Bulletin readers a very happy and prosperous New Year 2014!
Notes by Chairman of the Editorial
and Publication Committee
Notes by Chairman of the Editorial and Publication Committee
Special Features4
New Year Message by Dato’ Lim Kok Cheong, President of ACCCIM
Special Features 5
the Appendix, but they are detailed in the Finance Bill, and these are denoted as ‘***’.
Significant points addressed by the Budget are detailed in this write-up.
Economy
• The GDP Growth in 2014 is estimated to expand at 5% to 5.5% (2013: 4.5% to 5%). Growth will be supported by increase in Private Investments at 12.7% (2013: 16.2%) and Private Consumptions at 6.2% (2013: 7.4%).
The services sector is the key contributor to economic growth. The sector’s contribution to GDP has increased from 49.3% in 2000 to 55% in 2013..
• The Government proposed Total Expenditure of RM264.2 bn (2013: RM251.6 bn) with Operating Expenditure RM217.7 bn (2013: RM201.9 bn) and Development Expenditure RM46.5 bn (2013: RM49.7 bn).
• The proposed Revenue is RM224.1 bn (2013: RM208.6 bn) with 56% (2013: 55.5%) from Income Tax and 17.3% (2013: 17.8%) from Indirect Taxes.
Thus, it is expected that greater effort will be put in by the Inland Revenue Board (“IRB”) to increase income tax collections.
• The proposed Operating Expenditure represents 97.1% (2013: 96.8%) of the proposed Revenue and 82% (2013: 80%) of the Total Expenditure.
• The Budget Defi cit of RM40.1 bn (2013: RM43 bn) is equivalent to 3.5% (2013: 4%) of GDP.
TAX IMPLICATIONS OF THE
2014 NATIONAL BUDGETAT A GLANCE
The 2014 Budget was tabled at the Parliament by YAB Dato’ Sri Mohd. Najib Tun Haji
Abdul Razak, Prime Minister cum Minister of Finance of Malaysia, on 25 October 2013 Friday at 4pm. The theme of this Budget is “Strengthening Economic Resilience, Accelerating Transformation and Fulfilling Promises”.
The Budget focus on 5 main areas:
1. Invigorating Economic Activity
2. Strengthening Fiscal Management
3. Inculcating Excellence in Human Capital
4. Intensifying Urban and Rural Development
5. Ensuring Well-Being of the Rakyat
The purpose of this write-up is to provide an insight on the Budget proposals. The Budget proposals are subject to subsequent enactment by way of Finance (No. 2) Act 2013 (“Finance Bill”) and Gazetted Orders and thus the proposals may be amended by the Government prior to the enactment. Professional advice should be sought in order to appreciate specifi c tax implications to you and your business.
Most of the Budget proposals are effective from year of assessment (“YA”) 2014 onwards, but some are effective from YA 2015 or 2016 onwards, or on certain specifi c dates. There are certain signifi cant tax matters not mentioned in the Budget Speech and
Special Features6
This is the 17th consecutive year of Budget Defi cits. Let us look back on the past 10 years, the Budget Defi cit for years 2005 to 2007 was kept below 4% of GDP and the year 2008 increased to 4.8%. For year 2009, the defi cit increased to 7.4% of GDP and this was due to the economic downturn. For years 2010, 2011 and 2012, the defi cit was 5.6%, 5.4% and 4.5% of GDP respectively. There has been gradual reduction of defi cit (as a percentage of GDP) since year 2010.
• The proposed Government’s Subsidies and Assistance amount is RM39.3 bn (2013: 37.7 bn).
Goods and Services Tax (“GST”)
• GST will be implemented effective from 1 April 2015 and will replace both Sales Tax and Service Tax. The proposed initial GST rate will be 6% for standard rate.
• GST is to be charged on goods and services at all levels namely production, manufacture, wholesale and retail.
• GST is to be charged on goods and services supplied within Malaysia or imported into the country.
• Supplies made by the Federal and State Government are not within the scope of GST except for some services prescribed by the Ministry of Finance (“MoF”).
• Supplies made by the local authorities and statutory bodies in relation to regulatory and enforcement functions are not within the scope of GST.
• GST charged on all business input such as capital assets and purchases of materials and services is know as Input Tax whilst GST charged on all supplies made (sales) is known as Output Tax.
For eligible businesses, the Input Tax incurred is used to set-off against the Output Tax in accordance with GST Laws.
The businesses can ask for GST refund from the Kastam if the Output Tax is not suffi cient to set-off against the Input Tax.
The businesses must pay the difference to the Kastam if the Output Tax is more than the Input Tax.
• There are 3 types of supply: (a) Zero-rated supply (b) Exempt supply (c) Standard-rated supply at 6%
• The threshold for purposes of registration under GST is the annual sales value of RM500,000. Businesses below the threshold are not required to register but may register on a voluntary basis.
• GST returns must be submitted (together with the GST payment) to the Kastam every quarter, but those businesses with sales more than RM 5 million must submit/pay every month.
• The Kastam have prepared detailed GST Schemes for certain specifi c industries and will come up with GST rulings in due course.
• GST is now for real and we would advise the businesses to get ready. Do not wait till the last moment.
Deemed interest income on loan or advances to directors
• A new section 140B of Income Tax Act 1967 (“ITA”) be introduced to provide that where a company makes any loan or advances of any money from the internal funds of the company to Directors, the company shall be deemed to have derived interest income at end of each month based on the average lending rate of commercial banks published by the Bank Negara for those months. {the Bill states that this is effective from YA 2014 onwards, but the IRB clarifi es that MoF will issue a concession for this to be effected from 1 January 2014} ***
This proposal aims to expand the scope of company taxation by deeming interest income on loan or advances to directors as taxable income of the lending company. This is to counter-act on
Special Features 7
those companies which take advantage on tax-exempt interest income enjoyed by individuals.
The meaning of “Director” is defi ned in s75A(2) of ITA as amended by the Finance Bill. “Director” means any person who is occupying the position of director (by whatever name called) including any person who (a) is concerned in the management of the company’s business and (b) is, either on his own or with one or more connected persons, the owner of, or directly or indirectly control 20% (this 20% is amended from 50% in the Finance Bill) or more of the ordinary share capital of the company.
If a company charges the director for interest on such loan or advances and the actual interest is less than the interest computed based on the formula, the actual interest is disregarded. There is no deemed interest income if the actual interest is more than the interest computed based on the formula.
Director’s liability
• It is proposed that Director, who holds 20% (amended from 50%) or more of the ordinary share capital of the company, is responsible for any tax due and payable by the company. {effective upon operation of the Finance (No. 2) Act 2013} ***
Defi nition of “Entertainment”
• The defi nition of “Entertainment” under s18 of ITA be amended to include expenses incurred by a taxpayer or his employee with or without consideration paid whether in cash or in kind, in promoting the business carried by that taxpayer. {effective from YA 2014 onwards} ***
The effect of such proposal is entertainment expenses incurred in promoting the business would be allowed for 50% tax deduction, other than the exceptions stated in s39(1)(l).
“Entertainment” includes:
a. provision of food, drink, recreation or hospitality of any kind; or
b. provision of accommodation or travel in connection with or for the purpose of facilitating entertainment of the kind mentioned in (a).
Deduction not allowed for failure to furnish information requested by the Director General of the IRB (“DGIR”)
• A new sub-section 39(1A) of ITA be introduced to provide that where a taxpayer is required by the DGIR to furnish any information within the time specifi ed in a notice or such other time as may be allowed by the DGIR, and that information concerns wholly or in part a deduction claimed by that taxpayer, the deduction shall be disallowed if the taxpayer fails to provide such information within the time specifi ed or such extended time allowed. {effective from YA 2014 onwards} ***
Taxpayers will need to ensure that the relevant information required by the DGIR be furnished within the stipulated timeframe to avoid the deduction be disallowed. If such information cannot be obtained with the stipulated timeframe, the taxpayer must ask for an extension of time from the DGIR.
Gains or profi ts from a business arising from stock in trade parted with by any element of compulsion
• A new section 4C of ITA be introduced to provide that business income includes gains or profits arising from stock in trade parted by any element of compulsion including compulsory acquisit ion by an authority. {effective from YA 2014 onwards} ***
Property development companies would be affected by such proposal where the lands are treated as stock in trade in the accounts. Gains arising from compulsory acquisition by an authority would be treated as business income and thus subject to income tax, instead of real property gain tax.
Special Features8
Appeal on deemed assessment
• A new sub-section 99(4) of ITA be introduced to provide that the right of a taxpayer to appeal to the Special Commissioners of Income Tax (“SCIT”) is not applicable to the deemed assessment, except where the taxpayer is aggrieved by the public rulings issued by the IRB. {effective upon operation of the Finance (No. 2) Act 2013} ***
Under the system of self-assessment, the income tax returns or amended returns fi led by taxpayers are deemed to be tax assessment. Currently, a taxpayer aggrieved by the deemed assessment is given the right to fi le an appeal to the SCIT via submission of Form Q to the DGIR (whether or not aggrieved by the IRB public rulings).
Company shall e-submit its income tax return
• New sub-sections 77A(1A) and 77A(4) of ITA removes the manual fi ling option and make it mandatory for a company to fi le its income tax return electronically to the DGIR. Such return has to be based on accounts audited by a professional accountant in accordance with the Companies Act 1965 (“CA”). {effective from YA 2014 onwards} ***
Company under liquidation is not required by the CA to have its accounts audited. This proposal seems to have overlooked this.
Payment of withholding tax due
• A new sub-section 140(2A) of ITA be introduced to provide that DGIR be empowered to issue a notice to require a person to remit withholding tax that should be deducted and payable to the IRB within a specifi c timeframe. {effective upon operation of the Finance (No. 2) Act 2013} ***
Reduction in corporate income tax rates
• Reduction in corporate income tax rate from 25% to 24%. Tax resident SME Company’s income tax rate will be reduced from 20% to 19% on chargeable
income up to RM 500,000. {effective from YA 2016 onwards upon amendment to ITA in the future}
Reduction in income tax rates forco-operative societies
• Reduction in income tax rates for co-operative societies by 1% to 2% across various tax bands and the maximum tax rate is reduced from 25% to 24%. {effective from YA 2015 onwards upon amendment to ITA in the future}
Training expenses in line with Goods and Services Tax (“GST”) implementation
• Expenses incurred for GST related training in accounting and Information Technology and Communications (“ICT”) be given double tax deduction. {to be gazetted by way of Statutory Order for YA 2014 and YA 2015 only}
Secretarial and tax fi ling fees
• Secretarial fee and tax fi ling fee be allowed for deduction in computing the income tax liability. {to be gazetted by way of Statutory Order for YA 2015 onwards}
Accelerated capital allowance (“ACA”) on ICT equipment
• ACA on ICT equipment be extended for 3 years. {to be gazetted by way of Statutory Order for YA 2014 to YA 2016 }
The current ACA on ICT equipment expires in YA 2013.
Implementation of minimum wages
• The difference between the original salary and the minimum wages paid by the employers (which are SME Companies, co-operatives, associations, trust bodies and societies) be given a further tax deduction. {to be gazetted by way of Statutory
Special Features 9
Order for the period from 1 January to 31 December 2014 only}
Flexible work arrangement (“FWA”)
• Expenses incurred by an employer in training employees, supervisors and managers as well as consultancy fees incurred to design an appropriate FWA be given a further tax deduction. {to be gazetted by way of Statutory Order for applications for FWA status received by Talent Corporation Malaysia Berhad between 1 January 2014 and 31 December 2016}
Interest income from loan transactions between related parties
• A new sub-section 29(3) of ITA be introduced to provide that interest on loan transactions between related parties is deemed obtainable on demand when the interest is due to be paid. This aims to clarify on when interest income on loan transactions between related parties is to be recognised. {effective from YA 2014 onwards} ***
Deduction for interest on money borrowed
• A new sub-section 33(4) of ITA be introduced to provide that a taxpayer is only eligible to claim a deduction in respect of interest from money borrowed against its business income when such interest is due to be paid. However, the deduction would be given in the year the interest is payable. {effective from YA 2014 onwards} ***
Thus, the new sub-sections 29(3) and 33(4) aims to align the timing taxing of interest income on the lender and deduction of interest expenses by the borrower.
Limited liability partnership (“LLP”)
• Controlled transfer provisions shall apply in respect of the assets transferred by the converting partnership or company to the
newly formed LLP. A LLP is not entitled to make a claim for capital allowances in respect of the assets transferred for the YA in which the conversion occurred unless a claim has not been made by the converting partnership or company in that YA. {effective upon operation of the Finance (No. 2) Act 2013} ***
Appeal to SCIT
• A new sub-section 102(1A) of ITA be introduced to provide that, for double taxation arrangement under s132 of ITA, it is proposed that mutual agreement procedure be applied fi rst before the case is submitted to the SCIT. {effective upon operation of the Finance (No. 2) Act 2013} ***
Other proposals affecting Companies and Businesses
• Estimate of tax payable for SME Companies. {effective from YA 2014 onwards} ***
• Basis period of a company, LLP, trust body or co-operative society following change of fi nancial year end date. {effective from YA 2014 onwards} ***
• Basis period of a company, LLP, trust body or co-operative society for the first year of assessment. {effective from YA 2014 onwards} ***
• Reduce the deduction of permitted expenses for investment holding companies. {effective from YA 2014 onwards} ***
• Extending the deductibility of contributions to chartable organisations. {effective from YA 2014 onwards} ***
• Taxation of withdrawals of contributions made to a deferred annuity or a Private Retirement Scheme (“PRS”). {effective upon operation of the Finance (No. 2) Act 2013} ***
• Double deduction for anchor companies under vendor development programme. {to be gazetted by way of Statutory Order for MOUs signed by both anchor companies and MITI from 1 January 2014 to 31 December 2016}
Special Features10
• Tax deduction for Takaful businesses. {effective from YA 2014 onwards} ***
• Withholding tax on profi t distributed or credited to participants for Takaful funds. {effective from YA 2014 onwards} ***
• Extension of incentives under the Green Lane Policy Programme. {to be gazetted by way of Statutory Order for applications received by MoF on or before 31 December 2017}
• Mutual administrative assistance in tax matters. {effective upon operation of the Finance (No. 2) Act 2013} ***
Changes affecting Individuals
Monthly tax deduction as fi nal tax
• A new section 77C of ITA be introduced to provide that, to facilitate employees whose total income is equivalent to the amount of monthly tax deducted (“MTD”) throughout the year, it is proposed that such taxpayers will no longer be required to submit the annual income tax returns, and thus render the amount of MTD as the fi nal tax paid. {effective from YA 2014 onwards}
This proposal is only applicable to:
a. employees who receive employment income prescribed under s13(1)(a), (d) and (e) of ITA
b. employees whose MTD are made
c. employees serving under the same employer for a period of 12 months in that YA
d. employees whose MTD are not borne by the employer for that YA
e. employees who have not elected for joint assessment
However, the DGIR retains the power to raise a deemed assessment or an additional assessment and disregard the deeming of the total amount of MTD deducted as fi nal tax.
Reduction in individual income tax rates
• Reduction in individual income tax rates by 1% to 3% across various tax bands and the maximum tax rate is reduced from 26% to 25%. The maximum chargeable income band is raised from RM100,000 to RM400,000. {effective from YA 2015 onwards upon amendment to ITA in the future}
Special tax relief for middle income taxpayers
• Special tax relief of RM 2,000 be given to resident middle income taxpayers earning up to RM8,000 per month (aggregate income of up to RM96,000 p.a.). {to be gazetted by way of Statutory Order for YA 2013 only}
Other proposals affecting individuals
• Withdrawal from deferred annuity scheme or PRS will be taxed at a rate of 8% if such withdrawal is made before the age of 55, other than reasons of permanent total disablement, serious disease, mental disability, death or permanent leaving Malaysia. This is to encourage contributors to retain their savings for retirement, not for short-term. {effective upon operation of the Finance (No. 2) Act 2013} ***
• Government to increase its contribution to 1Malaysia Pension Scheme (“SP1M”) from 5% to 10% and maximum of RM60 to RM120 per year. {effective from 1 January 2014 to 31 December 2017 by way of EPF regulations}
• Individual be given a one-off incentive of RM500 if the individual participates in PRS. The individual must have a minimum of cumulative investment of RM1,000 within a year and is of age 20 to 30. This proposal is to encourage youths who are 20 to 30 years old to save for their retirement. {effective from 1 January 2014 to 31 December 2018 but there is no proposed legislation yet}
Special Features 11
Tax Incentives
• Extension of tax incentives for new four and five-star hotels. {to be gazetted by way of Statutory Order for applications received by MIDA from 1 January 2014 to 31 December 2016}
• Tax incentive for use of green technology. {to be gazetted by way of Statutory Order and the effective date is to be determined}
• Tax incentive for research and development of bio economy. {to be gazetted by way of Statutory Order for applications received by BiotechCorp from 1 January 2014 to 31 December 2018}
Real Property Gain Tax (“RPGT”)
• The 2014 Budget increases RPGT rates on the gains from disposal of real properties or shares in real property companies (“RPC”) from 1 January 2014:
The proposed RPGT rates are even more
stringent than those rates before RPGT was suspended. RPGT has been suspended for the period from 1 April 2007 until 31 December 2009.
In 2010 Budget, the Government brought back RPGT at 5% fl at rate for disposal within 5 years with effect from 1 January 2010. Disposal of shares in RPC would also be affected as the shares in RPC are deemed chargeable assets within the meaning of Real Property Gain Tax Act 1976.
The 2012 Budget stipulates that the RPGT rate for disposal of real properties or shares in RPC for holding period up to 2 years be changed to 10%. RPGT rate for disposals after 2 years and up to 5 years remains as 5%.
The 2013 Budget increases the RPGT rate by 5% for disposals within 5 years, i.e. RPGT rate 15% for disposal within 2 years and 10% for disposal between 2 to 5 years.
• Amendments to various provisions of Real Property Gain Tax Act 1976 to strengthen the enforcement. {effective upon operation of the Finance (No. 2) Act 2013} ***
Stamp Duty
• Exemption of loan agreements under the soft loan incentive scheme for SME. {effective upon operation of the Finance (No. 2) Act 2013}
• Amendment to s9 and s47A of Stamp Act 1949. {effective upon operation of the Finance (No. 2) Act 2013} ***
Indirect tax
• Import duty exemption on research and development equipment for companies that invest in pi lot plants for the purpose of pre-commercialisation.
National Council Member of ACCCIM on 31st December 2013.
Prepared by
Mr. Lee Hooi Seng,
Date of disposal Companies Citizen& PR
Non-Citizen
a. within 3 years 30% 30% 30%
b. in the 4th year 20% 20% 30%
c. in the 5th year 15% 15% 30%
d. thereafter 5% nil 5%
Special Features12
How GST Works?
(Out of Scope (Exempt) (Zero Rated) (Standard Rated)
(Taxable supplies)(Non-taxable
supplies)
(Non-taxable supplies)
(Out of Scope)
(Exempt)
(Taxable supplies)
(Zero Rated) (0%)
(Standard Rated) (6%)
Special Features 13
How GST Works?
(private transaction)
(Input Tax)
ACCCIM Activities14
Appointment of President of ACCCIM as Member of National Unity Consultative Council and Establishment of ACCCIM National Unity Committee
Y.A.B. Dato’ Sri Mohd. Najib bin Tun Abdul Razak, Prime Minister of Malaysia awarded the Certifi cate of Appointment to Dato’ Lim Kok Cheong, President of ACCCIM.
ACCCIM Activities 15
Group Photo taken between Y.A.B. Dato’ Sri Mohd. Najib bin Tun Abdul Razak, P r i m e M i n i s t e r o f M a l a y s i a a n d Members of National Unity Consultative Council.
ACCCIM Activities16
Following the announcement of National Budget 2014, ACCCIM has submitted a Memorandum
on “Some Negative Socio-Economic Impacts of the National Budget 2014” to Y.A.B. Dato’ Sri Mohd. Najib bin Tun Abdul Razak, Prime Minister of Malaysia cum Minister of Finance on 7th November 2013. In view of some of the issues raised are related to the housing and property sector, the ACCCIM has submitted the memorandum to Y.B. Dato’ Haji Abdul Rahman bin Dahlan, Minister of Urban Wellbeing, Housing and Local Government on 18th November 2013, and at the same time, seeking an appointment with Y.B. Minister to discuss and deliberate further on issues affecting the housing and property industry.
The ACCCIM’s meeting with Y.B. Dato’ Haji Abdul Rahman bin Dahlan, Minister of Urban Wellbeing, Housing and Local Government was held on 12th December 2013 at the Ministry of Urban Wellbeing, Housing and Local Government in Putrajaya. Also present at the meeting were Deputy Minister Y.B. Datuk Halimah binti Mohd Sadique, Secretary-General Y.Bhg. Dato’ Seri Arpah binti Abdul Razak, and senior offi cials of the
Ministry of Urban Wellbeing, Housing and Local Government (KPKT). The ACCCIM delegation was led by Datuk Ter Leong Yap, Deputy President and attended by Dato’ Teo Chiang Kok, Deputy Secretary-General cum Chairman of Construction, Property and Infrastructure Committee, Mr. Lim Tai Soon, National Council Member, Mr. Tan Tian Meng, Deputy Chairman of Construction, Property and Infrastructure Committee and Mr. Peck Boon Soon, Deputy Chairman of Socio-Economic Research Committee.
The meeting was conducted in a frank, open and friendly manner. The ACCCIM has expressed its deep concerns on the following issues and hoped that the suggestions will be considered favourably by the Government for the betterment of the socio-economic growth of our nation:
(1) Real Property Gains Tax (RPGT) – The frequent changes create a negative ‘flip-flop’ policy message to investors. To abate this ‘fl ip- fl op’ complaint, it is fair that the proposed change in RPGT rates should not be retrospective. Investors who made their investment
Datuk Ter Leong Yap presented the ACCCIM publications to Y.B. Minister of Urban Wellbeing, Housing and Local Government. (From left) Mr. Peck Boon Soon, Mr. Tan Tian Meng, Mr. Lim Tai Soon, Dato’ Teo Chiang Kok, Datuk Ter Leong Yap, Y.Bhg. Dato’ Seri Arpah binti Abdul Razak, Secretary-General, Y.B. Datuk Halimah binti Mohd Sadique, Deputy Minister and Y.B. Dato’ Haji Abdul Rahman bin Dahlan, Minister of Urban Wellbeing, Housing and Local Government.
ACCCIM Meeting with Y.B. Minister of Urban Wellbeing, Housing and Local Government
ACCCIM Activities 17
decisions based on the RPGT Rate-schedule at the time of investment should enjoy the rate-schedule then and not be affected by the subsequent changes.
(2) RM One Million Threshold for Foreigner Purchase - Foreign purchase is merely 5% of property transactions and such a meagre low 5% do not impact nor drive up property prices. We need a vibrant free-market segment of the property market to fund the cross-subsidies for low and medium cost housing as well as the holding cost for Bumiputera Quotas and Bumiputera Discounts and all the capital works and contributions to the monopolistic essential service providers. All these cross-subsidies have now accumulated to up to 30% of cost and a dire burden imposed on middle-income house purchasers. Strong foreign purchase will add vibrancy to the free-market property segment, so essential to fund the cross-subsidy schemes.
(3) Developer Interest Bearing Scheme (DIBS) - DIBS is a very useful scheme as while the property is being build, the buyer would still be either paying their mortgage for their current home they are staying in or paying rent. Having to pay interest on progressive payments for the new property loan is a double burden. The need to pay interest on progressive payment will make purchasing a property less affordable to many. They can afford only either to pay their current mortgage loan or rental but not concurrently to also pay progress payment interest. Further, abolishing DIBS inadvertently transfer back the risk onto to the purchaser.
(4) Exemption of Goods and Services Tax (GST) for Residential Properties - There is no absolute scientific formula to allocate shared services cost between residential d e v e l o p m e n t a n d n o n - r e s i d e n t i a l development activities and this will open up many opportunities for the Customs Department to dispute the formula and demand unfair penalties and assessments. ACCCIM propose that residential properties be zero-rated for GST which will need no
allocation formula and make accounting simple and straight-forward.
(5) Capital Contributions – Utility service providers such as TNB, Telekom, IWK, relevant water providers, Gas Malaysia etc. are privatised private sector companies. Besides requirements such as land for main intake sub-stations, distribution sub-stations, telephone exchanges, reservoirs, sewerage treatment plants, gas stations etc., over and above, they also imposed fi nancial contributions that are levied based on a percentage of the selling price or rental income of the properties. It is not acceptable in principle that developers and ultimately the consumer should pay and subsidise the capex of these companies.
(6) Increase of Land Premium - Some States (Selangor and Penang) have increased the cost of land approval up to 300 per cent. Deposit has gone higher and land premium has been increased. This has added burden to businesses.
Other issues discussed were too much ground floor areas and front boundary of a building have been taken by utilities service providers for sub-stations, pumps and meters thus resulting in that the ground fl oor areas have less frontage and less commercial value; OKU (Orang Kurang Upaya) Standard set by some of our Local Governments (for example Petaling Jaya) is getting over enthusiastic and higher than the world standard; Government should put in more effort to improve the effi ciency of the approval process of housing development projects; and proposal to establish a Board of Building Managers under the Ministry of Urban Wellbeing, Housing and Local Government.
The ACCCIM would like to extend its heartfelt appreciation to Y.B. Dato’ Haji Abdul Rahman bin Dahlan, Y.B. Datuk Halimah binti Mohd Sadique and Y.Bhg. Dato’ Seri Arpah binti Abdul Razak for sparing time to meet up and discuss with us on issues affecting the housing and property industry. It has been a fruitful meeting and ACCCIM hope that KPKT will continue to engage ACCCIM in future for consultation and discussion.
ACCCIM Activities18
Datuk Ter Leong Yap, Deputy President of ACCCIM has led a 7-member delegation to pay a courtesy call on Y.A.A. Tun Arifi n
bin Zakaria, Chief Justice of Malaysia at Palace of Justice, Putrajaya on 20th December 2013. The objectives of the courtesy call were to follow up on issues discussed at the previous meeting held on 1st March 2013 and to gather recent updates and new developments in the Malaysian Judicial System as well as present feedbacks on behalf of business community.
Also present at the courtesy visit was Y.A.A. Tan Sri Dato’ Seri Md Raus bin Sharif, President of Court of Appeal. Members of ACCCIM delegation were Deputy Secretary-General Dato’ Teo Chiang Kok, National Council Members Mr. Michael Chai, Dr. Chua Siew Kiat, Mr. Wong Yim Fatt and Dato’ Wong Pui Lam, Deputy Chairman of Legal Affairs Committee Mr. Tan Kar Peng and member of Legal Affairs Committee Mr. Chong Jee Min.
ACCCIM has submitted a memorandum for consideration of Y.A.A. Chief Justice of Malaysia. Issues raised were:
I. Arbitration, Mediation, and Alternative Dispute Resolution (ADR)
II. Court InterpretersIII. Appointments, Promotions, Confi rmations, and Retirement
of JudgesIV. The Judiciary with their expertise in wrestling with many
legal issues within the realism of commercial life should take part in law reform
Y.A.A Tun Arifin was responsive on issues raised by ACCCIM and indicated that he will looked into the issues and seek solutions. ACCCIM would like to extend its heartfelt gratitude to Y.A.A. Tun Arifi n bin Zakaria, Chief Justice of Malaysia and Y.A.A. Tan Sri Dato’ Seri Md Raus bin Sharif, President of Court of Appeal for sparing their valuable time to meet up and discuss with us.
Datuk Ter Leong Yap presented a souvenir to Y.A.A. Tun Arifi n bin Zakaria, Chief Justice of Malaysia
Courtesy Call on Y.A.A. Tun Arifi n bin Zakaria, Chief Justice of Malaysia
ACCCIM Activities 19
Seminar on Human Resources
Session 1: Moderator Mr Koong Lin Loong and Speaker Mr. Kua Abun.
Mr. Kua Abun
Group photo of role players with Minister of Human Resources (MOHR) YB Dato’ Sri Richard Riot, ACCCIM President Dato’ Lim Kok Cheong and Secretary General of MOHR Dato’ Seri Zainal Rahim.
ACCCIM Activities20
Session II: (From left) Panellist Mr. Richard Lee, Moderator Dato’ Andy Seo and Speaker En. Asri.
Session III: (From left) Panellist Mr. Lim Kok Boon, Speaker Mr. Shanmugam and Moderator Dato’ Low Kian Chuan
En. Asri Ab Rahman
Mr. T. Shanmugam
En. Mohd Sahar bin Darusman
YB Minister presided a Press Conference after the Opening Ceremony of the Seminar, accompanied by Dato’ Lim Kok Cheong, President of ACCCIM.
ACCCIM Activities 21
From left were Mr. C. S. Tang, Datuk Sundra Rajoo, Mr. Michael Chai, Tan Sri Dato’ Sri Lim Sing, Mr. Edmund Sim, and Mr. Philip Koh.
Roundtable onTrans-Pacifi c Partnership Agreement (TPPA)
The Legal Affairs Committee of ACCCIM organised a Roundtable on TPPA themed “Why TPPA matters to your
business and how it impacts the market and industry?” on 19th November 2013. Kuala Lumpur Regional Centre for Arbitration was the sponsor for this roundtable, while the supporting organisation and supporting media were Appleton Luff and The Star.
The main objective of this roundtable was to analyze and provide the latest information on TPPA to the business community, as most enterprises, especially SMEs, are in the dark as to the coming of the TPPA.
The opening speech was delivered by Tan Sri Dato’ Sri Lim Sing, Vice-President of ACCCIM. The keynote speaker for this roundtable was Mr. Edmund Sim, trade law expert who has expressed his expert opinion and addressed the various points of view on TPPA and the compatibility of the TPPA with the Regional Comprehensive Economic Partnership (RCEP).
The panel discussion during the roundtable was moderated by Mr. Philip Koh, senior partner of Mah-Kamariyah & Philip Koh, while the panelists made up from Professor Datuk Sundra Rajoo, Director of KLRCA and Mr. Michael Chai, ACCCIM National Council Member cum Chairman of ACCCIM Legal Affairs Committee. This roundtable had attracted about 100 participants to attend.
Issues discussed including Investor State Dispute Settlement (ISDS), Rules of Origin (ROO), Intellectual Property Rights (IPRs) and market access.
ACCCIM Activities22
14
The 14th Malaysia-Taiwan Joint Economic Conference
From left : Y.B. Datuk Ir. Hj. Hamim Samuri, Datuk Syed Ali Alattas, Mr. Wang Chung-Yu and Dato’ Low Kian Chuan.
ACCCIM Activities 23
Y.B. Datuk Ir. Hj. Hamim Samuri
D a t o ’ Muhammad Alayuddin bin Che Hassan
Dato’ Syed Hussien Al Habshee
Y.B. Datuk Ir. Hj. Hamim Samuri, Deputy Minister of Ministry of International Trade and Industry Malaysia witnessing the signing of Memorandum of Understanding (MOU) between National Chamber of Commerce and Industry of Malaysia and Chinese International Economic Cooperation Association.
ACCCIM Activities24
ACCCIM Activities 25
2nd Forum on Retired Executives & Professionals- Tapping Opportunities
Tan Sri Dato’ Soong (middle) reading a newspapers published overseas for retirees. From left were Mr. Josh Liew, Mr. Yong Chong Soon, Mr. Jeff Kong and Mr. Kenneth Loh.
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ACCCIM Activities26
Mr. Ong Kim Seng has retired as Executive Director of ACCCIM after the maturity of his employment contract
with ACCCIM on 15th December 2013.
Mr. Ong Kim Seng has served in ACCCIM Secretariat for full 40 years. He has been the fi rst and only CEO of ACCCIM’s permanent Secretariat since its inception in 1973. Mr. Ong has served under the leadership of successive Presidents of ACCCIM, namely the late Datuk Choong Han Leong, the late Datuk Koh Pen Ting, the late Tan Sri Dr. Lee Yan Lian, the late Tan Sri Datuk Amar Wee Boon Ping, Tan Sri Dato’ Lim Guan Teik, Tan Sri Datuk Seri Utama William Cheng, and the current President Dato’ Lim Kok Cheong. Mr. Ong Kim Seng has made numerous remarkable contributions to the development of ACCCIM during his long service in ACCCIM.
The ACCCIM National Council expresses its high respect and heartfelt thanks to Mr. Ong Kim Seng for his permanent loyalty, dedication and contributions to ACCCIM, and wishes him a Happy Retirement Life.
Glorious Retirement ofMr. Ong Kim Seng as Executive Director of ACCCIM
ACCCIM Activities 27
Farewell Dinner to H.E. Datuk Chai Xi, Ambassador of People’s Republic of China to Malaysia
Group photo between H.E. Datuk Chai Xi and ACCCIM representatives.Group photo between H.E. Datuk Chai Xi and ACCCIM representatives.
ACCCIM Activities28
Visit by Delegation from Leshan City, Sichuan Province,
China
Tan Sri Dato’ Sri Lim Sing presented a souvenir to delegation From Leshan City, Sichuan Province, China.
Photo was taken between delegates of Kenya Government and ACCCIM representatives.
Visit by Delegation ofKenya Government
ACCCIM Activities 29
Tan Sri Dato’ Soong Siew Hoong presented ACCCIM publications to Mr. Barr Macdonald Obasuke.
ACCCIM representatives interacted with Delegation of Investment Promotion Division of Anshan Municipal Bureau of Foreign Trade and Economic Cooperation, Liaoning Province, China
Visit by Delegation of Investment Promotion Division of Anshan Municipal Bureau of Foreign Trade and Economic Cooperation, Liaoning Province, China
Visit by Delegation of Edo State Government of Nigeria
Mr. Angel Ngu presented a souvenir to ACCCIM, which was received on behalf by Tan Sri Dato’ Sri Lim Sing.
Visit by Delegation of Federation of Filipino- Chinese Chambers of
Commerce & Industry, Inc
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