Singapore firms voice concerns over Johor’s levy on foreign vehicles

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http://www.todayonline.com/singapore/spore-firms-voice-concerns-over-johors-levy-foreign-vehicles?singlepage=true

The Malaysian government’s decision to impose a levy on all foreign-registered vehicles entering Johor Baru has alarmed the business community in Singapore, with trade associations here saying they expect the move to increase costs for companies with interests across the border.

“Many of our members have business connections or factories based in Malaysia. We have also launched the Business Expansion Programme to specifically help companies to expand their businesses in Iskandar Malaysia and Riau Islands Indonesia,” said Mr Lam Joon Khoi, secretary-general of Singapore Manufacturing Federation (SMF).

Mr Lam’s comment came a day after Malaysian Prime Minister Najib Razak confirmed plans to impose a Vehicle Entery Permit (VEP) fee on vehicles entering Johor Baru from Singapore.

Malaysia’s decision follows Singapore’s announcement earlier this month that it would raise its VEP fee for foreign-registered cars to S$35 from S$20 from August.

Details on the exact fee and implementation timeline are still being discussed, but Johor Chief Minister Mohamed Khaled Nordin has previously proposed a levy of RM20 (S$7.80).

While that amount isn’t too expensive, it raises further questions on the escalating costs of operating in Malaysia, said Mr Kurt Wee, president of the Association of Small and Medium Enterprises (ASME).

“More importantly, it further diminishes Malaysia’s advantages for us. The place is already becoming not as cheap as we’d hoped, not to mention the tightening labour market there.”

Singapore is the largest foreign investor in Iskandar, having committed investments of RM11 billion as of April this year.