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Tax Concerns Challenge Export-Interested SMEs

via theedgemarkets : KUALA LUMPUR (Aug 8): Transfer pricing and taxation concerns are one of the biggest hurdles facing small and medium enterprises (SMEs) that are interested in exporting their goods, said Baker Tilly (Malaysia).

“These SMEs have a fear of the unknown. They hear about things like tax investigations from their peers in other SMEs and they are worried about exporting themselves,” said Datuk Lock Peng Kuan, partner and audit and assurance co-leader at Baker Tilly (Malaysia).

Lock was speaking at the launch of the China Belt and Road Desk by Baker Tilly today, one of the first of its kind in Malaysia that aims to address the accounting, tax, and business advisory needs for companies to facilitate trade and other business opportunities between China and Malaysia.

According to Lock, the Belt and Road initiative can give companies such as SMEs that face bottlenecks in local demand access to new markets.

Apart from engaging local SMEs, Baker Tilly has also seen significant enquiries from Chinese firms looking to invest or carry out business activities in Malaysia, he said.

“State-owned enterprises are taking the lead, mostly in the infrastructure and construction sector, followed by advisory and consulting companies,” Lock added.

Infrastructure spending is something the Chinese state is good at, said Koh King Kee, director of Baker Tilly’s China Belt and Road desk. Countries along the Belt and Road route, on the other hand, are handicapped by their inability to invest large sums in infrastructure, he added.

Koh stressed that the Chinese initiative was driven by its need to transform its economy via further integration with trading partners and other nations.

Meanwhile, the Digital Free Trade Zone will see its e-World Trade Platform (eWTP) launched in October this year, said Malaysia Digital Economy Corp’s (MDEC’s) head of the seller adoption programme, Carol Fung.

For the e-fulfilment hub at Kuala Lumpur International Airport (KLIA) Aeropolis, a process improvement task force led by the prime minister to improve cargo clearing time from 6 hours to 3 hours has also been established, she said.

Lock added that Baker Tilly is looking forward to working with MDEC in order to encourage SMEs to take advantage of e-commerce in cross-border trade.

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