KUALA LUMPUR, Aug 21 -- The Federation of Malaysian Manufacturers (FMM) has asked the government to reduce the corporate tax rate to 20 per cent from the current 24 per cent in the upcoming 2020 Budget.

Its president, Datuk Soh Thian Lai said the government could emulate Singapore and Vietnam in cutting their corporate taxes to enable industry players to enjoy higher profits amid the current environment.

“With more profits, they (industry players) could make more investments,” he told a media briefing in conjunction with the release of the FMM-Malaysian Institute of Economic Research (MIER) Business Conditions Survey for the first half of 2019 (H1 2019) here, today.

The 2020 Budget is scheduled to be tabled in Parliament on Oct 11 this year.

Soh said 40 per cent of the 509 respondents hoped the corporate tax could be reduced in the 2020 Budget.

However, he said the federation’s members understood the problems faced by government, especially in tackling the hefty national debt.

Meanwhile, FMM council member Tan Sri Saw Choo Boon proposed an increase to the Sales and Service Tax (SST) base in the budget to expand the government’s income.

“Or they could reduce the operating expenses and set aside more allocations for development budget,” he said.

Echoing Saw’s views, Soh said in previous years, only 17-18 per cent out of the annual budget totalling about RM250 billion were allocated for development purposes.

“If the government could increase it to 24 or 25 per cent, at the same time cut down the wastage or leakages, it would definitely push the economy to grow much faster,” he said.

Held in collaboration with MIER, the survey was carried out from June 4-July 28, 2019 with 509 FMM members polled nationwide.

-- BERNAMA