Of APs, Import Duties and Red Tape

Approved permits - or APs - give its owners the ridiculous right to import goods in a restricted list such as cars, foods, construction materials, and others. AP was introduced in the 1970s to help promote trade and business, especially among bumiputera. But is has been a flawed mechanism. The favoured few gain from profiteering, raise the cost of doing business, and increase prices for a range of goods from cars to cement, concrete, steel, and food.

Then a system of import permits, bureaucracy, red tape, and outright corruption has augmented the problems caused by APs.

https://www.cabq.gov

The entire process of importing from overseas at minimal cost and hindrance has been compromised. It is estimated that some 60 percent of all food items are imported. This amounted to RM76 billion in 2022. If the current Madani government is keen to unshackle the economy, these obstacles must be removed.  

The government should also roll back duties, especially import and excise duties, which result in higher prices for many products far above their cost of production overseas. The prime examples are cars and motorcycles which are twice or more expensive because of the heavy protective duties imposed to “support” the national car and motorcycle projects such as Proton, Perodua and Modenas.

It’s time to establish a timeline to remove progressively these duties. Excessive bureaucracy always creates corruption.  One easy way of speeding processes up is to declare what is required for any approvals - if these requirements are met, approval is automatic. If the authorities want a proper handle on these, just talk to many of the small businesses such as restaurants, shops, traders, bars and pubs, health centres, etc., and find out from them the extent of constant harassment they face from authorities who are supposed to facilitate their businesses, not place obstacles.

If red tape and corruption are not cut to the bone, the economic cost to the country will be significant. If the Madani government could do some of these things, the future for Malaysia will be brighter. Otherwise, it will be the usual mere talk but no action. And that’s what happened with our Budget 2024—subject of a another blog.

Reference:

Comment: Removing APs, import duties, and red tape, P Gunasegaram, Malaysiakini, 26 September 2023