KUALA LUMPUR: In its pursuit of growth. Malaysia often looks toward developed countries but it must be careful to avoid the mistakes made by these countries, said Institute for Democracy and Economic Affairs (IDEAS) senior fellow Carmelo Ferlito.
“Malaysia is making the mistakes that Italy made a decade ago.” he said at the “Tax and Regulatory Policies: Impacting How Malaysians Do Business” seminar today.
He said Malaysia’s business environment is good in terms of its tax system, political stability, incentives, good infrastructure, ease of doing business and strategic regional hub “However on the dark side, it has a long history of government intervention where the government decides what is good for the people.” Ferlito said in the long-run.
This would create a bad mentality among the people which is bad for businesses. He said some of the recent alarming signals of the government becoming more invasive include the Goods and Services Tax. price control, withholding of taxes and payment of taxes in advance, which are all potential threats to businesses.
“Payment of taxes in advance would drain the cash resources of companies and create cash flow problems. Although you can claim it back later, in Italy’s experience the reimbursement can take up to 10 years.” he added