THE Government must embark on innovative measures to recover the billions of ringgit spent on the pandemic will make their way to aid Malaysia’s economic recovery.
This follows the details of the National Recovery Plan (NRP) by Prime Minister Tan Sri Mahiaddin Yassin to take the country out of the health and economic crisis by year end.
“Nevertheless, the road to recovery will be challenging, and will require additional creative measures that can facilitate economic recovery in the aftermath of the pandemic,” commented Datuk Fazli Nordin, managing director of Retail and Trade Brands Advocacy Malaysia Chapter (RTBA Malaysia).
RTBA Malaysia is a non-governmental organisation for advocating effective regulatory, financial and taxation policies affecting retailers and brand.
“For one, we can look at opening up pathways to increase foreign direct investments (FDI),” suggested Fazli.
“Due to supply chain disruptions caused by the pandemic, multinational enterprises are re-evaluating their global footprint and calibrating their sourcing strategies. Malaysia can design appropriate policies aimed at attracting investment during following the pandemic and beyond.”
For example, Myanmar has adopted a COVID 19 Economic Recovery Plan which includes an active investment promotion and facilitation policy that encompasses fast-tracking approvals for investment in labour-intensive and infrastructure projects as well as a reduction in investment application fees.
Additionally, RTBA recommends creating new revenue streams that can generate income for the nation.
“We can do this by regulating the Malaysian vape industry and expanding the taxation framework which now only limit to vape devices and non-nicotine e-liquids,” suggested Fazli.
According to reports, the Malaysian vape industry is worth some RM2.27 bil and has the potential to grow to RM10 bil in a few years if nicotine e-liquids are allowed for sale with regulations.
Moreover, local players which are made up of primarily SMEs will have the bandwith to expand their footprint.
“Additionally, the Government needs to consider expanding the taxation framework for vape e-liquids to include e-liquids with nicotine which make up 97% of the market. By doing so, Malaysia stands to gain some RM300 mil in excise duty in the first year alone,” opined Fazli.
Pointing to Indonesia as a prime example, he said since the introduction of a vape tax in the country, the industry has seen growth in excess of 60% between 2019 and 2020. In 2019, the industry succeeded in contributing tax revenue to the tune of 500 bil rupiah (RM140 mil) to the Government.
In 2020, the tax revenue generated from this industry was approximately 700 bil rupiah (RM201 mil).
Additionally, RTBA suggests that Malaysia revitalises its tourism sector which has been one of the hardest hit industries.
“The pandemic is an opportunity to rethink tourism for the future. Tourism is at a crossroads and the measures put in place today will shape the tourism of tomorrow,” envisages Fazli.
“Governments need to consider the longer-term implications of the crisis, and start putting in measures to promote the structural transformation needed to build a stronger, more sustainable and resilient tourism economy.” – June 18, 2021