ACCCIM: Gov’t policy, politics to blame for bad business in 2015
Government policy is chief among the reasons cited by business owners for poorer performance in the first half of 2015, the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM).
Other factors cited by business owners surveyed by ACCCIM include the political situation, rise in operating costs and increase in domestic competition.
“Many businesses have put forth their grouses, mainly in relation to factors such as rising costs of doing business in Malaysia, and the ever increasing compliance requirements to be adhered to by businesses.
“Issues related to the need to comply with requirements such as the Competition Act 2010, minimum wages, Anti-Profiteering Act 2011 and Goods and Services Tax (GST) Act 2014, have added to the burden of doing business in Malaysia, and this has not been helped by the deterioration of the exchange rate for ringgit and fluctuations of the commodity prices,” it said.
ACCCIM’s annual survey on 365 of its committee members found 67 percent said margins shrunk due to the goods and services tax (GST) introduced on April 1.
And despite this, most said they do not understand the workings of the GST five months since its implementation.
Respondents, whom ACCCIM said were key players in their local business communities, said explanations sought from the Royal Customs Department were "partly clear".
Unable to maintain prices
ACCCIM found close to half surveyed admitted that they were unable to maintain prices in the first half of the year.
This is in stark contrast with the survey findings in the second half of 2014, where 70 percent of respondents said they were still able to maintain prices.
A total 51 percent from the manufacturing sector were forced to take a cut in margins and bring down prices in the face of GST, resulting in poorer performance.
Similar trends were seen in the wholesale retail sector, albeit in a smaller scale.
“Perhaps, based on the latest experience and looking into the future, some 35 percent of the respondents forecast the need to reduce their selling prices of the goods and services to stay in business for the forecast 6 months forward for the 2nd half of 2015.
“This also represents the second consecutive period of survey where more and more respondents opined similar sentiments […]
“This is in line with more businesses expecting their sales orders to drop and they may have to reduce prices to maintain market share,” ACCCIM said.
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