MICCI seeks clarity on sales tax refunds in 2027 Budget
KUALA LUMPUR: The Malaysian International Chamber of Commerce and Industry (MICCI) has urged the government to clarify the 2027 Budget measure allowing manufacturers to reclaim sales tax on eligible machinery, spare parts and equipment bought from local traders or distributors.
The Malaysian International Chamber of Commerce and Industry (MICCI) has called for government clarification on a recently announced budget measure that will enable manufacturers to reclaim sales tax on specific purchases in 2027. These eligible expenses include machinery, spare parts, equipment from local traders, and various raw materials like pharmaceutical products, animal feed, fertilisers, and pesticides.
While MICCI believes this move could help lower costs for eligible manufacturers, they urge the government to clearly define the extent and eligibility requirements of this facility and consider expanding it to cover a wider range of manufacturing inputs. MICCI acknowledges the government's efforts to streamline bureaucracy and enhance public service delivery through the STAR team and the Government Service Efficiency Commitment Programme.
However, these initiatives must yield measurable results. Regarding the proposed increase in the minimum wage to RM2,000, MICCI warns that higher payroll expenses could intensify financial strain on labour-intensive sectors already facing growing operational costs. The chamber urges the government to factor in these cumulative cost pressures and provide ample time for businesses to adjust.
Beyond short-term financial pressures, MICCI believes the budget aligns with Malaysia's investment and digital economy objectives. The expansion of the Johor-Singapore Special Economic Zone and expanded tax incentives for Global Services Hub activities from January 2027 are expected to draw more investment, with long-term benefits contingent on their success in generating sustained economic activity and quality employment.
Ultimately, the budget's effectiveness hinges on proper execution. MICCI stresses the importance of clear policies, predictable procedures, and manageable operating costs to maintain business confidence and stimulate investment. MICCI looks forward to ongoing collaboration with the government to ensure the budget fosters a competitive, resilient, and sustainable business ecosystem.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
