ANNOUNCEMENT 15 Oct 2010

In October 2010, the government of Malaysia announced a change in its trade finance instruments.

NUMBER OF INTERVENTIONS

2

  • 0 harmful
  • 2 neutral
  • 0 liberalising

SOURCE



Office of The Prime Minister of Malaysia. (2010). Budget speech 2011. Available at http://www.pmo.gov.my/?menu=speech&news_id=349&page=1676&speech_cat=2


Inception date: 01 Jan 2011 | Removal date: open ended
Still in force

Production subsidy

On 15 October 2010, the Malaysian Prime Minister held his Budget speech for 2011. Its implications for foreign commercial interests can be summarized under the following categories.
 
Industrial policy

  • Agriculture. RM 3.8 billion shall be used to facilitate productivity increases and higher returns in the agricultural sector. On top of this, RM 974 million shall be spent in form of a price subsidy for paddy, fertilisers and paddy seeds. A further RM 230 million shall raise incentives to increase paddy yield.
  • Creative industry. A sum of RM 200 million shall be used topurchase "high quality locally-produced films, dramas anddocumentaries".
  • Electrical and electronics industry. RM 857 million shall be "allocated for local companies to invest in high value-added actitivities".
  • Palm oil and related industries. RM 297 million shall be allocated to support the replanting of trees with high quaility new clones; RM 150 million shall be allocated to help "domestic oleo derivatives companies" as well as downstream palm oil industries.
  • Oil, gas and energy. RM 146 million are to be allocated in support of the oil, gas and energy industry.

 
Investment policy

  • Broking licences. The Securities Commission will introduce three new stock broking licences for which local, foreign or joint venture companies may apply.
  • Bursa Malaysia. An international board shall be developed to enable the listing of foreign securities.
  • Research, development and commercialisation (R&D&C). RM 411 million shall be used to suppord R&D&C activities.
  • Venture capital. RM 100 millin shall be made available through a fund to provide soft loans for start up companies.

 
Tariffs

  • Consumption goods. The import duty on 300 unspecified goods shall be abolished. The goods shall come from the categories "apparel,handbags, shoes, shampoo, suits, children's apparel, wallets, haircolourants, golf balls, imitation jewellery, talcum powder, curtains,table cloth, blankets, bed sheets, shirt, undergarments, lingerie,nightwear, perfumes and mosquito netting".
  • Renewable energy generation. The import duty and sales tax exemption on equipment for the generation of energy from renewable sources and enegery efficiency shall be extended until 31 December 2012.
  • Hybrid vehicles. The full import duty as well as the full excise duty on hybrid cars as well as hybrid and electronic motorcycles shall be suspeneded until 31 December 2011.
  • Broadband equipment. The import duty and sales tax exemption on broadband equipment shall be extended "two years until 2012".

 
Export incentives

  • Export credits. In the coming year, takaful contributions for export credit shall be given double tax deduction.

 
Migration

  • Foreign workers. The number of foreign workers in Malaysia shall be reduced further in the future. As instruments, the Prime Minister proposes increasing levies on foreign workers according to the sector they work in, and a requirement to procure health insurance for foreign workers.
  • Permanent residence. The government plans the introduction of a point system for applications for permanent resident status. Under the new system, applications may besubmitted after 5 years compared with 10 years previously.

 

Inception date: 01 Jan 2011 | Removal date: open ended
Still in force

Import tariff

On 15 October 2010, the Malaysian Prime Minister held his Budget speech for 2011. Its implications for foreign commercial interests can be summarized under the following categories.
 
Industrial policy

  • Agriculture. RM 3.8 billion shall be used to facilitate productivity increases and higher returns in the agricultural sector. On top of this, RM 974 million shall be spent in form of a price subsidy for paddy, fertilisers and paddy seeds. A further RM 230 million shall raise incentives to increase paddy yield.
  • Creative industry. A sum of RM 200 million shall be used topurchase "high quality locally-produced films, dramas anddocumentaries".
  • Electrical and electronics industry. RM 857 million shall be "allocated for local companies to invest in high value-added actitivities".
  • Palm oil and related industries. RM 297 million shall be allocated to support the replanting of trees with high quaility new clones; RM 150 million shall be allocated to help "domestic oleo derivatives companies" as well as downstream palm oil industries.
  • Oil, gas and energy. RM 146 million are to be allocated in support of the oil, gas and energy industry.

 
Investment policy

  • Broking licences. The Securities Commission will introduce three new stock broking licences for which local, foreign or joint venture companies may apply.
  • Bursa Malaysia. An international board shall be developed to enable the listing of foreign securities.
  • Research, development and commercialisation (R&D&C). RM 411 million shall be used to suppord R&D&C activities.
  • Venture capital. RM 100 millin shall be made available through a fund to provide soft loans for start up companies.

 
Tariffs

  • Consumption goods. The import duty on 300 unspecified goods shall be abolished. The goods shall come from the categories "apparel,handbags, shoes, shampoo, suits, children's apparel, wallets, haircolourants, golf balls, imitation jewellery, talcum powder, curtains,table cloth, blankets, bed sheets, shirt, undergarments, lingerie,nightwear, perfumes and mosquito netting".
  • Renewable energy generation. The import duty and sales tax exemption on equipment for the generation of energy from renewable sources and enegery efficiency shall be extended until 31 December 2012.
  • Hybrid vehicles. The full import duty as well as the full excise duty on hybrid cars as well as hybrid and electronic motorcycles shall be suspeneded until 31 December 2011.
  • Broadband equipment. The import duty and sales tax exemption on broadband equipment shall be extended "two years until 2012".

 
Export incentives

  • Export credits. In the coming year, takaful contributions for export credit shall be given double tax deduction.

 
Migration

  • Foreign workers. The number of foreign workers in Malaysia shall be reduced further in the future. As instruments, the Prime Minister proposes increasing levies on foreign workers according to the sector they work in, and a requirement to procure health insurance for foreign workers.
  • Permanent residence. The government plans the introduction of a point system for applications for permanent resident status. Under the new system, applications may besubmitted after 5 years compared with 10 years previously.