KUALA LUMPUR: The Malaysian Investment Development Authority (Mida) has eased further the cost of doing business for the manufacturing sector by putting in place a self- declaration mechanism for exemption of import duty and sales tax on machinery and equipment.
Mida chief executive officer Datuk Azman Mahmud said the investment agency, which had previously been swamped with no less than 5,000 applications, seeking exemption annually.
“With the self-declaration mechanism, we are targeting to reduce the number of physical applications to the minimum by 2015,” he told a media briefing yesterday.
Since the launch of the mechanism in early May, 280 companies have benefitted from the exemption.
The self-declaration mechanism helps to simplify the granting process for import duty and sales tax exemption on machinery, equipment, spare parts, consummables, prime movers and container trailers.
According to Azman, there are 1,200 companies, foreign and domestic-owned, which stand to benefit.
They are involved in the iron and steel, cement, paper and package as well as in petrochemicals.
Manufacturers in the Principal Customs Area (PCA), companies engaged in the hotel business and haulage operators can claim the exemption under these orders through a self-declaration process.
It has been well received by the companies is where the time taken to clear the goods has been reduced without the necessity of obtaining bank guarantee facilities.”
Tariff division director Jasbir Kaur explained that businesses also benefit because they can reduce the bank guarantee costs greatly as well as storage costs of the machinery and equipment.
With the self-declaration mechanism, a company is required to submit a confirmation letter issued by Mida together with the list of machinery, equipment, spare parts, consumables, prime movers and container trailers.
The key areas of the exemption are manufacturers in the PCA, companies engaged in hotel business and haulage operators.
Mida is also looking into other areas to ease the cost of doing business and Azman said raw material is likely to be the next stop.
