THE government has decided not to extend the 15-year period reinvestment allowance (RA) for manufacturers in the rubber industry as the current period is sufficient, said Deputy Minister of International Trade and Industry (MITI) Datuk Jacob Dungau Sagan.
“We have discussed this. We have decided to maintain the RA at the moment and abide by the standing rules (15-year period) that we have.
“In the future if there are issues related to this, we’ll look into it,” he told reporters after a recent MITI dialogue with rubber and rubber-based industry associations.
Some industries have requested for extensions of up to 30 years.
“The RA extension wasn’t considered in this Budget (2013) because the government views that the 15-year period to enjoy tax break for investment is sufficient,” he said.
He added that the second round pioneer status requested by manufacturers of rubber-based products in the medical devices industry is still under consideration.
“Normally new incentives will be announced during the budget. It will be considered with other proposals for the next budget (2014),” he said.
Earlier at the opening, MITI Minister Datuk Seri Mustapa Mohamed said his ministry has received four memoranda from rubber and rubber-based industry associations with 12 issues raised, including issues related to foreign workers, investment incentives, taxation, minimum wage and utility related issues namely gas, water and electricity.
He said total approved investments for January till July this year recorded more than six-fold increase to RM1.2 billion from RM191.4 million a year ago, the bulk of which were foreign investments.
The overall exports of rubber products for January till August rose 14.8% to RM13.41 billion from RM11.68 billion a year ago, with industrial rubber goods recording the biggest growth of 31.4%.
Total imports for the same period also grew 14.8%, to RM4.28 billion from RM3.73 billion a year ago due to increase of imports of rubber gloves (53%) and industrial rubber goods (48.6%).
“Malaysia’s rubber trade volume for the first eight months of this year increased by 14% to reach RM17.7 billion compared with the same period in 2011.
“The outlook for the rest of the year looks encouraging and we should be prepared to take advantage of improved conditions in the global economy and increased demand for our products,” said Mustapa.
He added that MITI is also currently negotiating free trade agreements (FTA) with the Trans-Pacific Partnership, the EU and Turkey to improve market access for Malaysian businesses.
He said the ministry is looking at a “possible conclusion” on a FTA with Turkey by year-end.(RJA)
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