MITI IN PROCESS TO IDENTIFY MORE SERVICES SUB-SECTORS FOR LIBERALISATION

KUALA LUMPUR, June 8 (Bernama) -- The Ministry of International Trade and
Industry (MITI) is in the process of identifying more services sub-sectors for
liberalisation.

Its minister Mustapa Mohamed said MITI would present its proposals to the
Cabinet within the next two months to continue with the momentum of
liberalisation.

Recognising the services sector's potential as the country's main engine of
growth, the government liberalised 27 services sub-sectors and dismantled the
Foreign Investment Committee guidelines last year.

"In terms of policy, MITI is working with the Finance Ministry and MIDA
(Malaysian Industrial Development Authority) to review our promotion lists and
to expand our incentives structure," Mustapa said at the Malaysia International
Chamber of Commerce and Industry (MICCI) annual luncheon Tuesday.

MITI, he said, was looking at introducing new incentives for domestic
companies to undertake new investments and expand their operations.

Mustapa said that several proposals were being studied for inclusion in the
next budget.

He said to address the shortage of skilled and technical workers, the
government was investing in re-skilling and technical training.

"Therefore, there are plans to establish an institute in Malaysia together
with Japan," he added.

According to Mustapa, there are several other interesting developing agendas
ahead to widen market access.

"We have started a scoping exercise for a Malaysia-European Union free trade
agreement. The next item on the development agenda is to participate in the
Trans-Pacific Partnership to allow for continued engagement with the United
States which remains an important market and source of investment for Malaysia,"
he said.

On the country's growth, the minister said although there were still a few
weeks to go before end of the second quarter, preliminary numbers indicated that
the second-quarter performance was likely to remain favourable.

In his luncheon address, newly elected MICCI president Charles Henry Ireland
said in order for the business environment in Malaysia to be transformed, a
lower corporate tax base was necessary.

"But it is accepted that this in turn will require a general overhaul of
taxation to spread the tax base more equitably and ensure that the government
still receives the necessary funds," he said.

A lower tax base is among the measures suggested by MICCI to the government
as the country is embarking on creation of the New Economic Model.

Ireland said another measure that Malaysia should look into was to regain
lost ground as an investment destination by creating a clear business identity.

He said that efforts to liberalise the services sector remained sluggish,
and therefore a new attitude was needed to accelerate services expansion and
investment.
-- BERNAMA