KUALA LUMPUR: Creative measures by the government to recover billions of ringgit to fight the Covid-19 pandemic is necessary to aid economic recovery.
Retail and Trade Brands Advocacy Malaysia Chapter (RTBA Malaysia) managing director Datuk Fazli Nordin said the Covid-19 pandemic has already hammered a devastating blow on regional and global economies.
"In Malaysia, we are starting to see the light at the end of the tunnel, with the prime minister Tan Sri Muhyiddin Yassin outlining details of the National Recovery Plan 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," he said in a statement today.
RTBA Malaysia is a non-governmental organisation that advocates effective regulatory, financial and taxation policies affecting retailers and brand.
In recommending several measures that the government can consider in Malaysia, RTBA Malaysia said the government could open up pathways to increase foreign direct investments (FDI).
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 following the pandemic and beyond, Fazli said.
For example, Myanmar has adopted a Covid-19 Economic Recovery Plan, which, among others, an active investment promotion and facilitation policy, including fast-tracking approvals for investment in labour-intensive and infrastructure projects and a reduction in investment application fees.
Additionally, RTBA Malaysia also 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 vape devices and non-nicotine e-liquids," Fazli said.
According to reports, the Malaysian vape industry is worth some RM2.27 billion.
It could grow to RM10 million in a few years if nicotine e-liquids allowed for sale with regulations.
Further, local players, which are primarily small and medium enterprises (SME), will have the capacity to expand their footprint, he said.
"Additionally, the government needs to consider expanding the taxation framework for vape e-liquids to include e-liquids with nicotine which make up 97 per cent of the market.
"By doing so, Malaysia stands to gain some RM300 million in excise duty in the first year alone," Fazli said while pointing to Indonesia as a prime example.
According to recent reports, since the introduction of a vape tax in Indonesia, the industry has seen a growth of approximately 60 per cent between 2019 to 2020.
In 2019, the industry succeeded in contributing tax revenue to the tune of 500 billion rupiahs to the government.
In 2020, the tax revenue generated from this industry was approximately 700 billion rupiahs.
Additionally,
"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 tomorrow's tourism.
"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," Fazli said.