Mainstreaming Market Ideas

Proposal for Half Day Seminar on Business Regulations

"Tax and regulatory policies: Impacting how Malaysians do business"

13 July 2017

Royal Lake Club, JalanCenderamulia, Kuala Lumpur

  1. Summary

This is a half day seminar to discuss the impact of taxation and government regulations on Malaysian businesses. This event will be organised in partnership with the Coalition for Business Integrity (CBI).

  1. Introduction

Taxes and Government regulations are inevitable costs on businesses. The key is to find an optimum balance between costs and benefits to the society.

However, very often government regulations ended up imposing costs that outweigh the purported benefits. These additional costs may be unsustainable for businesses, forcing some of them to close down. The regulatory burden also imposes opportunity costs which might deter entrepreneurs from starting a business or developing new products and services. Another impact of complex, poorly thought out regulations is that it creates incentives and opportunities for corruption. Businesses are tempted to give bribes to regulators rather than jump through hoops to navigate a complex and bureaucratic regulatory system. If the cost of bribery is lower than the cost of following proper regulations, businesses will be tempted to bribe the regulators.

The same applies to taxation. While it is impossible for government to operate without taxation, the type, structure and levels of taxation have an immense impact on individuals and businesses. If the taxes are too high, it could dampen economic activity. If it is too complex, it could create deadweight to the economy. The kind of taxation can also have an impact. For example, a tax on capital can negatively impact capital accumulation which is crucial for economic growth. Therefore, it is crucial for government to create a tax system that collects sufficient revenues for government and at the same time does not hinder economic activities.

In this, seminar we will discuss the impacts and costs of taxation and regulatory policies on businesses in Malaysia.

  1. Organiser and Participants

The seminar is organised by the Institute for Democracy and Economic Affairs (IDEAS) in collaboration with the Coalition for Business Integrity (CBI). The target audience will be officials from the Ministry of Finance, the Ministry of International Trade and Industry (MITI), Malaysian Investment Development Authority (MIDA), Economic Planning Unit (EPU) and other policy makers, representatives from chambers of commerce and business associations as well as economists from universities and research institutes.

  1. Objective
  • To discuss the costs of regulatory burden on Malaysian businesses
  • To explore how complex regulations incentivised business owners to engage

in corruption to reduce cost of doing business

  • To explore what an efficient tax system would look like
  • To explore the “hidden costs” of doing business in Malaysia
  1. Date and venue

The date of the seminaris 13 July 2017, to be held at the Royal Lake Club, Kuala Lumpur.

  1. Proposed Agenda

Time / Item
9.30 am / Opening remarks
9.45 am / Tax and regulatory policies: Impacting how Malaysians do business
Are our tax and regulatory policies competitive to MNCs?
Aurelia Silva, Executive Director, British Malaysian Chambers of Commerce (TBC)
Business regulations and Corporate Integrity: Balancing the need for a competitive regulatory environment and ensuring integrity in the corporate world
AmarjeetSingh, Ernst and Young
A competitive tax system for Malaysia
Ali Salman, IDEAS
The “Hidden Costs” of Doing Business in Malaysia
TBC
Moderator: Tricia Yeoh, Chief Operating Officer, IDEAS
10.30 am / Discussion
11.45 am / Concluding remarks
12.00 pm / END