December 2022 Date Given for Freight Forwarders to Meet Bumiputera Equity Requirement
The Ministry of Finance (MoF) has confirmed a second extension for freight forwarders to meet the requirement of 51 per cent Bumiputera equity participation, which will be set for December 2022.
Second Major Extension Period Granted by Malaysian Government
Tengku Datuk Seri Zafrul Abdul Aziz, Malaysia's Finance Minister explained that this extension was to allow the Bumiputera Agenda Steering Unit (TERAJU) to study and review the participation of the Bumiputera community in the logistics industry, plus other quarters, in greater detail.
Adding that the findings of the study would be tabled to the Cabinet to determine the direction of Bumiputera participation in the logistics sector, this would ensure the industry's continued growth.
"This is especially for improving the industry's efficiency, increasing productivity and maintaining low basic costs," he said during the Ministers' Question Time in the Dewan Rakyat today.
The minister was replying to a query from Loke Siew Fook (DAP-Seremban) on whether the government was reviewing the Bumiputera equity policy for freight forwarding companies as the condition was difficult to fulfil.
Tengku Zafrul pointed out that the issue was not new and any decision made by the MoF must take into account the interests of all stakeholders.
The Change in Context
"As announced yesterday by Prime Minister Datuk Seri Ismail Sabri Yaakob when tabling the 12th Malaysia Plan (12MP), 30 years after the New Economic POlicy's introduction, the Bumiputera shareholding stood at only 17.2 per cent (in 2019).
"Therefore, the proposals to introduce an equity safety net as well as a Bumiputera Prosperity Department to coordinate all initiatives related to the matter are much welcomed," he said.
In giving the background, he explained that the Bumiputera equity participation requirement was agreed on in 2015 by the Bumiputera Economic Council chaired by the then-prime minister. The decision was made in line with the findings of a TERAJU study.
He also explained that in 2015, the Federation of Malaysian Freight Forwarders had requested for an exemption on the requirement, and MoF in 2016 gave a waiver from the need to comply until Dec 31, 2020, for local companies with the International Integrated Logistics Services (IILS) status.
Subsequently, in December 2020, MoF decided to extend the period for the fulfilment of the Bumiputera participation requirement until Dec 31, 2021.
"At the same time, the exemption was also given to majority foreign-owned Customs agents with IILS status and companies listed on Bursa Malaysia," said Tengku Zafrul.