Malaysia's OPR Reduction Helps Cut Business Costs, Increase Purchasing Power - ACCCIM

KUALA LUMPUR, July 14 (Bernama) -- The 25 basis points reduction in the Overnight Policy Rate (OPR) to 3.0 per cent by Bank Negara Malaysia (BNM or Malaysia's Central Bank) will help ease the cost of doing business and benefit consumers, the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) said. ACCCIM President Ter Leong Yap said the OPR reduction is a measure of strategy by BNM to stimulate the market. "To a certain degree, this will ease a little bit the cost of doing business and it will also be good for consumers as they will have extra buying power. "However, this might put pressure on our ringgit," he told reporters after revealing the findings of the ACCCIM SME Taxation Survey Report 2016 here Thursday. When asked about the possibility of another rate cut in September, Ter said BNM would likely maintain the OPR for now, after unexpectedly reducing it at its Monetary Policy Committee meeting on Wednesday, citing rising risks from Britain's exit from the European Union. Meanwhile, Ter said the ACCCIM SME Taxation Survey Report 2016 highlighted that 80 per cent of the respondents indicated that the Goods and Services Tax (GST) had increased their operational costs. "The additional costs included the purchase of GST software and employment of additional staff. "Therefore, we hope the government will utilise the GST revenue wisely and create a conducive business environment," he said. ACCCIM also hoped the government would lower the corporate tax rate to 18 per cent and reduce the SME threshold taxable income to 15 per cent for the first US$507,017 (RM2 million). The Malaysian association also urged the government to lower the individual income tax rate to 18 per cent for the highest chargeable income bracket from 28 per cent. "By doing so, we will be able to enhance our competitiveness in order to attract more foreign direct investments, as well as boost the taxpayers discretionary spending into the market place. "This will increase the multiplier effects and bring back vibrancy into the economy," he added. On the same note, the BNM's move on Wednesday could also boost consumer buying power, especially in the property sector, says a developer. Green Target Group Managing Director and Chief Executive Officer Tan Hong Lai (forth, left) said following the reduction of the OPR, the interest rates for housing loans too would go lower. "The move will also affect fixed deposit rates, which means people may be looking at buying more properties rather than keeping their money in fixed deposit for better return on investment," he told reporters here Thursday. (photoBERNAMA) --BERNAMA