Malaysian rubber glove manufacturers have warned the government that they will export their products overseas – particularly to Myanmar – if their request for an extension of the reinvestment allowance from 15 years to 30 years is not met. The 15-year period expires in mid-2013.
Once the reinvestment allowance of the glove-makers expires, tax rates currently enjoyed by them will increase, leading to a slash in their profits.
The glove-makers have requested an extension citing lower profits due to rising labour costs, but their request has not been granted by the Ministry of International Trade and Industry, who says the 15-year allowance is adequate.
Dennis Low, vice-president of the Malaysian Rubber Glove Manufacturers Association (Margma), said: “The industry is at a crossroads. Labour costs are going to increase next year, so the industry is preparing to invest much in automation. Unfortunately, the government has indicated that it is not willing to extend the reinvestment allowance which will help us greatly. All we are asking for is another 5- to 10-year extension.”
The Malaysian government has in the past approved the request of industry players to extend the reinvestment period, but apparently not this time around. (RJA)