No Tax Cut for Sensitive Items: Official

Items on sensitive list will not enjoy export tax cut when the ASEAN Free Trade Agreement (AFTA) comes into force on Jan. 1, 2010, a local media reported on Wednesday.

Bernama quoted Malaysian International Trade and Industry Minister Mustapa Mohamed as saying that this was agreed earlier by the 10 ASEAN member countries.

The list included rice, tobacco and alcohol, said the minister after hosting a festive celebration at Kota Baharu, the state capital of Kelantan State.

Established in 1992, AFTA aims to increase ASEAN's competitive advantage in the globalized market and create an integrated market in the region.

While reducing trade barriers by implementing tax cut is a vital step, ASEAN's ultimate goal is to totally eliminate import taxes.

The AFTA council agreed that the target dates to achieve this objective will be 2010 for the six original member countries and 2015 for the newer members namely Cambodia, Laos, Myanmar and Vietnam.

Mustapa said AFTA would be able to attract investors into the region , benefiting consumers with efficient production.

He also said that his ministry had been guiding the country's small and medium scale entrepreneurs through various programs so that they could grab the arising trade opportunities.