Mahathir hints at corporate tax cut

Mahathir hints at corporate tax cut

KUALA LUMPUR (AFP): Malaysia's 28 percent corporate tax rate
may be lowered in the 2002 budget to be unveiled in October,
Prime Minister Mahathir Mohamad said Tuesday.

"We have studied the possibility (of a corporate tax
reduction). We must also consider our needs in terms of the
revenue to be raised from taxpayers," the premier was quoted as
saying by Bernama news agency.

Mahathir, who is acting finance minister following the
unexplained resignation of Daim Zainuddin on June 1, earlier
chaired a pre-budget dialog with 50 government and non-government
agencies.

The premier said next year's budget would focus on ways to
diversify sources of economic growth, strengthening the financial
sector and improving the country's competitiveness.

He said the budget would also provide incentives to raise
local investment amid the U.S. slowdown, including possible lower
taxes to promote trade and commerce.

The Federation of Malaysian Manufacturers has proposed that
the government cut personal income tax in the 2002 budget to
stimulate domestic consumption to ensure continued economic
growth, Bernama said.

To strengthen export competitiveness, it also suggested
incentives be given for in-house company training to increase
supply of skilled workers.

Mahathir said over the weekend that Malaysia can no longer
rely on foreign investment to pump prime the economy since
foreigners are seeking out cheaper countries such as China.

He said various manufacturing sectors would be developed to
raise local investment.