Marine industry appeals for incentives after being overlooked in Budget 2022 despite being ‘backbone’ of economy

Dr Renco Yong

KUCHING, Nov 5: Sarawak Association of Marine Industries (Samin) expresses hope for the Malaysian government to continue supporting the marine industry despite there being no special allocation or incentives for industry players announced in Budget 2022.

Samin took note of the various tax incentives, guarantees and funding facilities offered by the government and development financial institutions to businesses including SMEs, MSMEs and start-ups.

In addition, there are allocations to develop and enhance human capital especially in TVET-related skills and to encourage businesses to undertake digital transformation.

“However, it is glaring that there is no special allocation or incentives in Budget 2022 for the marine industry which serves as the backbone to Malaysia’s economy and crucial to its strategic interests”, said Samin president Dr Renco Yong in a press statement today.

Dr Renco believed that the marine industry’s importance to the wellbeing of the people and to Malaysia’s trade competitiveness and economic development cannot be over-emphasised.

He said some 95 per cent of the nation’s trade (by volume) is carried by ships and go through ports. Activities generated from oil and gas which are found offshore contribute 20 per cent to the nation’s GDP. In addition, activities such as shipbuilding, ship repair, naval design, marine equipment manufacturing, maritime training and education and a host of other supporting activities are essential components of the marine industries.

“Given its importance to Malaysia’s economy, it is therefore imperative for the government to continue supporting the growth and development of the industry to ensure that our economy remain globally competitive and strongly integrated in the global supply chain”, said Yong.

Yong said the marine industry is vital to Sarawak’s resource-rich and commodities-dependent economy and it generates tremendous multiplier effects in terms of economic growth, employment, skills development and investment, among others.

“Shipping — sea-based and riverine — facilitates much of the transportation of commodities produced in Sarawak to their markets and the distribution of cargos into and across the state.

“As such, the support of the Federal and Ftate governments in the form of incentives and favorable policies is crucial in helping industry players to grow and become competitive nationally and internationally”, he stressed.

File photo of shipyards at Rantau Panjang, Sibu.

He pointed out that the Covid-19 pandemic has severely affected the business of marine industry players in Sarawak including Samin members, owing to the economic downturn, Movement Control Order (MCO) and social distancing requirements imposed to curb the pandemic.

“It is our fervent hope that the Federal and Sarawak governments continue to extend support to industry players during these difficult times, despite being overlooked in Budget 2022”, he reiterated.

Against the backdrop of the still ongoing Covid-19 pandemic and the devastating impact it has wrought on the economy, both governments simply cannot afford to delay efforts to revitalise the economy and put it back on the path of growth.

“In this regard, marine industry players are hopeful that the government will come out with stronger policies push to help us stay on our feet during these challenging times through offering financial incentives, tax breaks, protection through the Cabotage Policy, institutional support and other means of policy intervention” he said.

Samin shared its ‘wishlist’ for future Budget with the following assistance on top of the list of incentives it would like to see offered to shipyards:

1. Bona fide status – which grants import tax and sales tax exemption on materials and equipment to shipyards to build and repair ships – to be automatically renewed instead of renewal every two years upon expiry, as of the current practice.

2. Introduction of 100 per cent Investment Tax Allowance (ITA) and pioneer status offered to companies involved in shipbuilding / ship repair and also supporting players in the marine industries including manufacturers of marine equipment.

3. Establishment of a Maritime Fund for qualified marine industry players to tap into to obtain loans and financing for working capital and to expand their business. — DayakDaily