KUCHING, Oct 27: The Associated Chinese Chambers of Commerce and Industry of Sarawak has called for a tax holiday for businesses to help revive the economy and encourage employers not to retrench their workers.
Its secretary-general, Jonathan Chai, said the tax waiver should be included in Budget 2021.
He said any tax reduction or waiver will help to cut operation costs and ease the cash flow problem faced by most sectors impacted by the Covid-19 pandemic.
“If a tax holiday cannot be implemented, the government should review the corporate tax structure for small and medium size enterprises,” he said. “Reduce the current 17% to 15% on the first RM600,000 taxable income, with the remaining chargeable income to be taxed at 20%.”
He said the government should also extend the wage subsidy programme for six more months, irrespective of whether there’s a drop in the volume of business.
He said the programme had helped a number of SMEs to stay afloat during the critical period, especially when the movement control order was imposed in March.
Sarawak SME Association secretary-general Jordan Ong said the government must show a strong commitment to encourage the work from home culture and assist small and medium business owners.
He said the main concern was to keep unemployment low by helping the SMEs to ride through the crisis.
He hoped there should be more incentives for digital and device-related purchases, and increased tax relief for lifestyle expenses from the current RM2,500 to RM3,500.
Ong also said the government should extend its wage subsidy programme and loan moratorium to SMEs.
He said that based on a survey conducted by his association, 65% of SMEs in Sarawak have benefited from the loan moratorium, and 73% said they still need assistance from the government.