Problems relating to Trade and Investment on Malaysia
6. Reduction and elimination of preferential policies for foreign capital |
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Issue |
Issue details |
Requests |
Reference |
| (1) Unstable Continuation of IDE on Steel | - Import duty is 25% on major steel items. Every year, a member firm's subsidiary (MFS) of JBCTIF must file application to Malaysian Investment Development Authority (MIDA) for Import Duty Exemption (IDE), decision of which is without guarantee, being left to the sole discretion of the competent authority. There is, however, no assurance that IDE is granted on each application. Should IDE be lifted from the steel import, acquisition of No-Objection Letter (NOL) from the local steel manufacturer becomes de-facto impossible. If discontinued, it will mean a great blow to the manufacturers locally manufacturing products from steel imported from Japan. In December 2014, GOM announced preliminary determination to impose the safeguard tariff (SGT) of 23.95%. (It possible that acquisition of NOL becomes no longer valid for obtaining the SGT exemption). MFS is requesting exclusion from imposition of the safeguard measures. |
- It is requested that GOM repeals the import duty of 25% on steel products, which are imported as materials for further manufacturing and processing. | - Customs Act |
| (2) Further Repletion of Benefits on R&D | - A member firm's subsidiary (MFS) has developed R&D operation in an existing manufacturing company. Nevertheless, GOM requires submission of a vast amount of materials on MFS's request for grant of double tax amount deduction. In the end MFS had to abandon its application. | - It is requested that GOM considers grant of incentives, which are both substantial and easy to obtain for R&D operation developed inside the existing manufacturing company. | |
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