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.