MALAYSIA: Sarawak, Sabah and Labuan exempted from cabotage policy
With effect from June 1, 2017 the states of Sarawak and Sabah as well as the Federal Territory of Labuan will be exempted from the cabotage policy. As per the erstwhile policy, only Malaysia-flagged ships were permitted to transport cargo from Peninsular Malaysia to these three territories and vice versa. As a result foreign vessels carrying freight bound for the three territories had to stop at the port of Klang in Selangor state in Peninsular Malaysia in order to transfer the goods to domestic ships for onward shipment to Sarawak, Sabah and Labuan.
The Malaysian transport ministry has announced that the exemption will however not apply to freight transport between Labuan and the states of Sarawak and Sabah. While the domestic shipping industry has protested against the government’s move to end the cabotage policy, it has been welcomed by the local administrations. It is believed that the policy had led to higher prices of commodities and as a result a higher cost of living in the three territories. Observers have stated that now it will be possible to ship goods directly to Sarawak, Sabah and Labuan without having to transfer at a Peninsular Malaysian port.
PHILIPPINES: Comprehensive tax reform package progresses
The Philippines House Ways and Means Committee has approved the first lot of tax reforms proposed by the administration of President Rodrigo Duterte. Legislators on May 3 approved the reform proposals which include cuts in personal income tax (PIT) and reduction of value added tax (VAT) exemptions. The latter proposal is aimed at countering revenue loss resulting from the lowering of PIT rates. Other elements of the reform package include new or higher excise duties on fuel, and higher excise taxes on automobiles.
As per the proposal to reduce PIT, the maximum rate of taxation will be reduced from the current 32 percent to 25 percent, except for high earners. In addition, while those earning less than P250000 (US$5000) annually will be exempted from payment of any tax, the ultra-rich will be taxed at the rate of 35 percent instead of the current 32 percent. The reform proposals will now be up for a second reading at the House Plenary.
LAOS: Land concession rules tightened
In its bid to crack down on unscrupulous developers, Laos’ government has announced tougher measures to regulate land concessions projects. Prime Minister Thongloun Sisoulith has stated that land concession rights will be withdrawn if no progress is made on projects beyond the officially agreed deadlines. The government has acknowledged that while many land concessions have been awarded, investors have failed to make any progress on projects. Investors are also known to acquire land concessions only to sell the rights to other investors and developers.
In order to end the practice of land concessions changing hands before any project is executed, the government has directed concerned local authorities to investigate any projects that lack progress and report to the government. The Central Committee of Laos Communist Party is expected to soon pass a resolution to address the country’s land use problems.
Dezan Shira & Associates Brochure
Dezan Shira & Associates is a pan-Asia, multi-disciplinary professional services firm, providing legal, tax and operational advisory to international corporate investors. Operational throughout China, ASEAN and India, our mission is to guide foreign companies through Asia’s complex regulatory environment and assist them with all aspects of establishing, maintaining and growing their business operations in the region. This brochure provides an overview of the services and expertise Dezan Shira & Associates can provide.
An Introduction to Doing Business in ASEAN 2017
An Introduction to Doing Business in ASEAN 2017 introduces the fundamentals of investing in the 10-nation ASEAN bloc, concentrating on economics, trade, corporate establishment, and taxation. We also include the latest development news for each country, with the intent to provide an executive assessment of the varying component parts of ASEAN, assessing each member state and providing the most up-to-date economic and demographic data on each.
Human Resources in ASEAN
In this issue of ASEAN Briefing, we discuss the prevailing structure of ASEAN’s labor markets and outline key considerations regarding wages and compliance at all levels of the value chain. We highlight comparative sentiment on labor markets within the region, showcase differences in cost and compliance between markets, and provide insight on the state of statutory social insurance obligations throughout the bloc.