Foreign investments must help Malaysia boost trade surplus, says Johari

 The investment, trade and industry minister says while exports continue to grow, the country's import value has reached RM1.45 trillion.

Investment, trade and industry minister Johari Ghani (at the wheel) said Proton’s tax contribution to the country has reached RM806 million. (Bernama pic)

TANJONG MALIM:

Foreign investments brought into Malaysia must yield tangible benefits for the national economy, including reversing the decline in the trade surplus, investment, trade and industry minister Johari Ghani said.

Johari noted that the country’s import value has reached RM1.45 trillion. While exports continue to grow, he said, the rise in imports has caused the national trade surplus to narrow.

“Although we are expanding our exports, our imports are also growing, which has led to a contraction in the trade surplus. We want to ensure it does not continue to shrink. It must grow.

“In the last six months alone, our trade surplus reached RM147.15 billion versus RM151.80 billion for the whole of last year,” he said after officiating Proton’s e.MAS 7 PHEV ceremony at the Proton EV assembly plant here today.

Johari said all industrial sectors, not just automotive, are welcome to invest in Malaysia. However, investors must consider the contributions they can make to the country rather than treating Malaysia as a market.

“Take Proton, for example. Its tax contribution to the country has reached RM806 million. What does this contribution comprise? It includes corporate taxes and excise duties.

“It pays import duties and sales taxes. This is in addition to income tax and corporate tax. Ultimately, all these benefit the country,” he said.

Johari said an investment can only generate a significant multiplier effect on the national economy if the investor develops the business in tandem with the local industrial ecosystem, rather than operating in isolation.

“We do not want investments brought into the country to kill off existing ones. Instead, we want these investments to coexist and complement each other,” he said.

Citing Proton again, he said it lacked the opportunity to boost production through advanced technology. “Geely possessed that technology and shared it with Proton. Subsequently, certain intellectual property was registered in Malaysia”.

Such arrangements constitute a “true partnership”, he said, rather than just an operation to export cars.

“Strictly speaking, a car is not an essential item. But if we want to turn this into something that benefits the people and the country – while creating job opportunities – then I will facilitate the process,” he said.

Johari said the government had introduced various incentives, including excise duty exemptions, to attract investment. Companies benefitting from these incentives must reciprocate with investments that bring about tangible returns to Malaysia.

“We have allowed EVs to enter the country for four years without import or excise duties. Total tax revenue foregone by the state amounts to RM3.3 billion,” he said. - FMT