Authors: Wan May Leong and Ryan Heng (WM Leong & Co)
1. Announcement of the 12th Malaysian Plan Mid-term Review
On 11 September 2023, the Prime Minister of Malaysia presented the Mid-Term Review of the 12th Malaysian Plan (2021 to 2025) (“Mid-Term Review”) to the House of Representatives of the Parliament. The Mid-Term Review outlines the Government’s strategy for achieving the objectives of the 12th Malaysian Plan by 2025 with a primary focus on enhancing sustainability, building a prosperous society and achieving high-income nation status. Within the Mid-Term Review, there are 17 “Big Shifts”, which will be implemented through 71 strategies. Among the legislative and policy reforms to fulfil the goals set out in the Mid-Term Review, notable matters are summarized as follows:
(i) The introduction of a Fiscal Responsibility Act to expand the government’s revenue base, streamline tax reliefs, reduce
leakages and spending wastages in procurement and projects, and improve the government’s debt management;
(ii) Acceleration of the adoption of the Government Procurement Act to enhance and standardize the government procurement system and emphasize the open tendering option to ensure efficient and transparent procurement; furthermore, amendments to the Financial Procedures Act 1957 will be made to provide for provisions on procurement practices including direct negotiation practices to better manage the procurement process;
(iii) The introduction of a new anti-corruption plan as guidelines to all public and private institutions on issues of integrity, governance and corruption; new legislation on anti-rent seeking will also be explored to promote transparency and economic efficiency;
(iv) The acceleration of the development of renewable energy sources such as solar, hydrogen, biomass and hydropower to generate clean energy and enable Malaysia to meet its net zero carbon target by 2050; one of the initiatives includes the implementation of the government’s National Energy Transition Roadmap (announced in August 2023) which outlines 10 flagship projects and initiatives, energy transition pathways and energy mix and emission reduction targets;
(v) New climate change laws to regulate the implementation of national climate change policies and obligations;
(vi) A bill to address cyber security issues and management will be tabled to enhance the quality of digital governance; also, a standard on e-commerce will be introduced to build trust and credibility of the e-commerce platforms;
(vii) The Companies Act 2016 and the Limited Liability Partnerships Act 2012 will be reviewed and amended to emphasize the beneficial ownership reporting framework, to further define the ownership of shares and control in company management and to enhance ownership transparency in both private and public sectors;
(viii) The introduction of new standards for halal products such as medical devices and pharmaceuticals as part of the initiative to develop Malaysia’s international halal market with the goal to have a halal export value of RM63.1 billion by 2025; and
(ix) The introduction of a low-rate capital gains tax, effective in 2024, on the disposal of unlisted shares; the Prime Minister had previously clarified that such capital gains tax would not apply to the disposal of listed shares.
2. The Trade Descriptions (Marking of Pre-Packaged Goods) Order 2023
- The Trade Descriptions (Marking of Pre-packaged Goods) Order 2023 (“Order”) made by the Malaysian Minister of Domestic Trade and Cost of Living has taken effect on 1 September 2023. The Order imposes marking requirements on pre-packaged goods and applies to wholesalers, manufacturers, importers and producers for all pre-packaged goods whether packaged, manufactured or produced in Malaysia or imported into Malaysia. However, the Order does not apply to goods which are pre- packaged for export outside of Malaysia.
Some of the notable requirements of the Order are summarized as follows: (i) Any pre-packaged goods shall, among others;
(a) have an appropriate indication, being a specific name or description and not a generic name or description, in relation to the goods;
(b) be expressed and marked with a nominal quantity in prescribed measurements;
(c) be expressed and marked with a specified quantity indicator for count; and
(d) have the name and address of the wholesaler, producer, manufacturer or importer of the goods.
- The markings on pre-packaged goods shall be (a) legible, (b) use clear words in the national language or national language and any other language where it is originated from Malaysia, (c) use clear words in the national language or English language should it have originated outside Malaysia, (d) be stamped or printed in colour which makes a clear difference with the background colour of the pre-packaged goods, and (e) have a minimum height of between two to six millimetres; and
- The pre-packaged goods shall not have a negative error greater than twice the tolerable deficiency as specified in the Order.