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Executive Report on Strategies in Malaysia
ICON Group International, June 2007, Pages: 391
How to Strategically Evaluate Malaysia
Perhaps the most efficient way of evaluating Malaysia is to consider key dimensions which themselves are composites of multiple factors. Composite portfolio approaches have long been used by strategic planners. The biggest challenge in this approach is to choose the appropriate factors that are the most relevant to international planning. The two measures of greatest relevance are “latent demand” and “market accessibility”. The figure below summarizes the key dimensions and recommendations of such an approach. Using these two composites, one can prioritize all countries of the world. Countries of high latent demand and high relative accessibility (e.g. easier entry for one firm compared to other firms) are given highest priority. The figure below shows two different scenarios. Accessibility is defined as a firm’s ease of entering or supplying from or to a market (the “supply side”), and latent demand is an indicator of the potential in serving from or to the market (the “demand side”).
Framework for Prioritizing Countries
Demand/Market Potential Driven Firm
Relative Accessibility
Accessibility/Supply Averse Firm
Relative Accessibility
In the top figure, the firm is driven by market potential, whereas the bottom figure represents a firm that is driven by costs or by an aversion to difficult markets. This report treats the reader as coming from a “generic firm” approaching the global market - neither a market-driven nor a cost-driven company. Planners must therefore augment this report with their own company-specific factors that might change the priorities.
Latent Demand and Accessibility in Malaysia
This report provides an extremely detailed overview of factors driving latent demand and accessibility in Malaysia. Latent demand is largely driven by economic fundamentals. But, latent demand only represents half of the picture. A country may at first sight appear to be attractive due to a high latent demand, but it is often less attractive when one considers at the macro level how easy it might be to serve that entire potential and/or general business risks.
Chapter 2 deals with macro-accessibility. While accessibility will always vary from one company to another for a given country, the following domains are typically considered when evaluating macro-accessibility in Malaysia:
Openness to Trade in Malaysia
Openness to Direct Investment in Malaysia
Local Marketing and Entry Strategy Alternatives
Local Human Resources
Local Risks
Across these domains, a number of not-so-obvious factors can affect accessibility and risk. These are also covered in Chapter 2, which is presented from the perspective of an American firm, though it is equally applicable to most firms entering Malaysia. This chapter has been authored by local offices of the U.S. Government. I have included a number of edits to clarify the provided information as it relates to the general strategic framework.
In Chapter 3, I summarize the economic potential for Malaysia over the next five years for hundreds of industries, categories, and products. The goal of this chapter is to report my findings on the real economic potential, or latent demand, represented by Malaysia when defined as an area of dominant influence. The data presented are the result of various spatial econometric and time-series forecasting models which, for each category presented, are applied to forecast and allocate latent demand across all countries of the world and major distribution centers or centers of dominant influence within each country. This is accomplished knowing that economic fundamentals (e.g. income) generally vary from one country to another within a given country over time. In this chapter, I report the allocation for each category for Malaysia as an area of dominant influence in Asia and, potentially, the world.
The report concludes with trade indicators for Malaysia. Often, the amount of trade flowing into and out of a country is a strong indicator of trading partners, trade openness, and related latent demand. Trade indicators are purely statistical in nature. Although international trade is not a direct measure of latent demand, it does provide an indicator of general market conditions with respect to trade flows and trade openness in Malaysia.
As a whole, this report presents a strategic assessment of Malaysia by considering an extremely broad set of factors affecting both latent demand and accessibility, as outlined in the following chapters.
MACRO-ACCESSIBILITY IN MALAYSIA
Economic Fundamentals and Dynamics
Infrastructure and the Multimedia Super Corridor (MSC)
Malaysia boasts a well-developed transportation and communications infrastructure. In June 1998, the Kuala Lumpur International Airport (KLIA), which has an annual capacity of 25 million passengers, began operations. In July 1999, the government officially opened the Multimedia Super Corridor (MSC), which was built to encourage high-tech investment and production in Malaysia. The MSC encompasses a nine-by-thirty mile zone extending south from Kuala Lumpur to the new international airport. Liberal regulatory and tax policies, as well as an updated legal regime, are designed to encourage electronic commerce, development of information technology applications, and advanced R&D.
Improved telecommunications and more efficient financial services infrastructure, as well as strengthened intellectual property protection, are essential for Malaysia to achieve its goal of transforming its economy from labor-intensive assembly operations to R&D-based information technology industry. The government is working to strengthen IT education and technological proficiency and English-language skills. In 2003, the government instituted reforms requiring that middle and high schools teach science and math in English. The government also reformed university admissions policies to move from racial quotas to merit-based admissions.
Recognizing the importance of biotech and the opportunities it represents as a growth engine, the government has taken steps to encourage the development of a biotech industry.
Government Intervention Risks
The government continues to take an active role in the development and industrialization of the Malaysian economy. This includes significant state investment, a close alliance between government and the private business sector, and a variety of policies and programs to bolster the economic status of the Malaysian and indigenous communities, commonly referred to as bumiputra.
Political Risks
The Political System
Malaysia is a stable, multiracial constitutional monarchy, nominally headed by the King, who serves a five-year term and is chosen from among the nine sultans. Malaysia has a parliamentary system of government, and executive power is vested in the cabinet, headed by the Prime Minister. The United Malays National Organization (UMNO), the Malaysian Chinese Association, the Malaysian Indian Congress, and a number of regional parties comprise the ruling coalition (Barisan National, or BN), which has governed Malaysia since its independence in 1957. UMNO is the dominant party in the coalition and its president traditionally serves as the Prime Minister.
Malays are the largest ethnic group in Malaysia and comprise approximately 58% of the population. About 25% of the population is ethnically Chinese and 7% is ethnically Indian. Other groups, including natives in Sarawak and Sabah in East Malaysia, make up the remainder of the population. Following ethnic riots in Kuala Lumpur in 1969, the Malaysian Government introduced policies intended to stimulate economic growth and to increase the percentage of wealth held by the Malay community. These policies remain in place but are controversial, as the political aim of promoting the Malay community is increasingly perceived to conflict with the economic objective of ensuring that Malaysia can compete in the global economy.
Malaysia in International Relations
Malaysia is a leading member of the Association of Southeast Asian Nations (ASEAN), an organization that the United States strongly supports. Malaysia has also generally played a helpful role in Asia-Pacific Economic Cooperation (APEC), which includes the United States and most of the economies of the Pacific Rim region.
Marketing Strategies
Creating a Sales Office
A number of international advertising, accounting, and consulting firms are located in Kuala Lumpur, which can provide market information and assist with the procedures and requirements for setting up a business in Malaysia. AmCham (American-Malaysian Chamber of Commerce) can be a useful resource for those interested in setting up an office or plant.
The primary concerns for those considering setting up an office or factory in Malaysia are registration and taxes, labor, wages, rental/construction prices, utilities, insurance and cleaning.
Registration of Foreign Companies
Foreign companies interested in doing business in Malaysia must register with the Companies Commission of Malaysia (CCM), formerly known as the Registrar of Companies (ROC). The same registration procedure applies whereby an application must be submitted on Form 13A to the CCM in Kuala Lumpur or any of its branch offices in Malaysia. If the intended name of the foreign company is available, the application will be approved and the name reserved for three months. Fees, including application and name reservation, depend on nominal share capital. Please see the Malaysian Industrial Development Authority (MIDA) Web site, www.mida.gov.my, for a more specific breakdown of fees.
Upon approval, applicants must lodge the following documents with the CCM:
A certified copy of its Certificate of Incorporation (or a document of similar effect) from the country of origin;
A certified copy of its Charter, Statute or Memorandum and Articles of Association or other instrument constituting or defining its constitution;
A list of its directors and certain statutory particulars regarding them (Form 79);
Where there are local directors, a memorandum stating the powers of those directors;
A memorandum of appointment or power of attorney authorizing one or more persons resident in Malaysia to accept on behalf of the company, service of process and any notices required to be served on the company;
A statutory declaration in the prescribed form made by the agent of the company (Form 80).
The appointed agent undertakes all acts required to be done by the company under the Companies Act 1965. Any change in agents must be reported to the CCM.
Every foreign company shall, within a month of establishing a place of business or commencing business within Malaysia, lodge with the CCM for registration notice of the situation of its registered office in Malaysia using the prescribed form.
A foreign incorporated company must file a copy of the annual return each year within one month of its annual general meeting. Within two months of its annual general meeting, the company must file a copy of the balance sheet of the head office, a duly audited statement of assets used in and liabilities arising out of its operations in Malaysia, and a duly audited profit and loss account.
Taxation
Most income of companies and individuals accrued in, derived from, or remitted to Malaysia is liable to tax. However, income remitted to Malaysia by non-resident companies and individuals is tax-exempt, except in the case of the banking and insurance business, and sea and air transport undertakings. A company is considered a resident in Malaysia if the control and management of its affairs are exercised in Malaysia.
Taxation Rates
For companies
28% (38% for the petroleum industry)
Personal income tax for non-residents
29%
Withholding tax
10-15%
Sales tax
0-25% (ad valorem single stage tax on import and manufacturing level)
Service tax
5%
A tax rate of 28% applies to both resident and non-resident companies. A company carrying out petroleum upstream operations is subject to a Petroleum Income Tax of 38%.
Rates of Capital Allowances
Capital allowances are given on qualifying capital expenditure. Initial allowances are given only once while annual allowances are given every year by the straight-line method. Some of the items accorded allowances are shown below. For plant and machinery, companies are advised to verify with the Inland Revenue Board on the specific items that qualify.
Initial Allowances
Industrial buildings
3%
Computer and IT equipment
20%
Environmental control equipment
40%
Annual Allowances
Industrial buildings
2%
Buildings used for educational/training purposes
10%
Computer and IT equipment
40%
Environmental control equipment
20%
Motor vehicles, heavy machinery
20%
Plant and machinery
14%
Others
10%
Labor Standards
The Employment Act of 1955 (Amendments 1998) is the main legislation on labor standards in Malaysia. Normal work hours are not to exceed 48 hours per week or eight hours per one day. A paid maternity leave of 60 days must be granted, as well as ten paid holidays, annual leave of 8 to 16 days, paid sick leave 14 to 60 days per year and overtime pay of time-and-a-half for normal work days, two-times for rest days and three-times for public holidays.
Under the Employees Provident Fund Act 1991, minimum contributions of 11% of employees’ monthly wages and 12% of employers’ monthly wages, are compulsory. The Social Security Organization (SOCSO) administers social security schemes for workers earning wages not exceeding RM 2,000 (U.S. $526) per month. The Human Resources Development Fund (HRDF) operates on the basis of a levy/grant system where contributing companies can apply for grants to subsidize the costs incurred in training their Malaysian employees. Mandatory contributions of 1% of monthly employee wages must be made by manufacturing companies that employ 50 or more Malaysians and companies employing from 10 to 50 employees and with a paid-up capital of RM2.5 million (U.S. $658,000) and above.
Any expatriate on staff requires a work permit. Obtaining a permit may take from two to three weeks with a fee ranging from RM200 - RM300 (U.S. $53-79) per month payable in advance for one year.
Wages
There is no national minimum wage law applicable to the manufacturing sector in Malaysia. Basic wage rates vary according to location and industrial sector, while supplementary benefits, which may include bonuses, free uniforms, free or subsidized transport, performance incentives and other benefits, vary from company to company. Wages in the manufacturing sector vary among executives with the average basic monthly salary ranging from RM 2,655 (U.S. $698) for executives to RM 8,584 (U.S. $2,259) for senior managers to RM 13,299 (U.S. $3,500) for top executives. Monthly non-executive salary averages range from RM615 (U.S. $162) for unskilled workers to RM933 (U.S. $246) for semi-skilled laborers to RM 1,320 (U.S. $347) for skilled workers/craftsmen. Most companies provide medical benefits to both executives and non-executives. Personal accident insurance is more commonly provided than life insurance and coverage is generally RM 100,000 (U.S. $26,315) or above (senior-middle executive) and RM50,000 (U.S. $13,158) or below (non-executives).
Rental and Construction Prices
Office rental rates run between U.S $3.68-14.16 (RM14.00 and RM53.80) per square foot, factory rental rates are from U.S. $0.09-0.52 (RM0.35 to RM2.00) per square foot. For those interested in factory buildings, costs range from U.S. $10.90-105.26 (RM41 to RM400) per square foot. Northern and western Malaysia have the cheapest rents, while costs rise as the location becomes closer to Kuala Lumpur. For a more detailed table of rental and construction rates, please see the Malaysian Industrial Development Authority (MIDA) Web site, www.mida.gov.my (click on Costs of Doing Business).
Utilities, Insurance, and Cleaning Costs
Using the 7 person office as an average, the monthly cost for insuring liability and assets is about U.S. $263 (RM 1,000). Office cleaning is roughly U.S. $92 (RM350) per month. As far as utility costs, water and air conditioning are usually part of the rental cost while electricity and telephones are not. For a more specific breakdown of utility costs, please see the MIDA Web site (Costs of Doing Business).
(Source: Malaysian Industrial Development Authority)
Creating a Joint Venture
Some exporters find it advantageous to establish their own subsidiary in Malaysia to directly handle sales, distribution, and service. While this provides more direct control, it requires a commitment of capital and the identification of suitable local joint venture partners. The selection of a joint venture partner is perhaps the single most important decision made by a potential investor in Malaysia.
All partnerships must be registered with the Companies Commission of Malaysia (CCM) under the Registration of Businesses Ordinance 1956. Partners are both jointly and separately liable for the debts and obligations of the partnership should its assets be insufficient. Formal partnership deeds may be drawn up governing the rights and obligations of each partner but this is not obligatory.
U.S. exporters interested in establishing a joint venture should contact the Malaysian Industrial Development Authority (MIDA) for more information about other government policies that may affect contract arrangements within their specific industry. MIDA may also be able to assist with the identification of a suitable partner.
Hiring Local Counsel
Any firm intending to establish a local office should secure the services of a local attorney. As a former British colony, Malaysia has a legal system based on British common law, making it more familiar to U.S. firms than legal systems based on European continental models. The Malaysian legal system is relatively transparent. There is a wide range of highly professional legal firms available.
Checking Bona Fides
Several firms gather information and publish reports on Malaysian companies, including Rating Agency Malaysia, United Management Services, and D&B Information Services. For major corporate transactions, financial advisors and lawyers can perform due diligence. Publicly listed companies are required to publish audited financial results, which can be checked prior to entering into business agreements. In smaller transactions, letters of credit are a standard requirement of potential customers, while bank references and track records can be checked prior to appointing agents.
Franchising Activities
The U.S. accounts for over 70% of foreign franchise sales in Malaysia, followed by the U.K., Taiwan, Singapore, and Australia. U.S. franchises dominate the fast food and restaurant industry and include the following: Kentucky Fried Chicken (KFC), McDonalds, A & W, Burger King, Starbucks, Seattle’s Best Coffee, Dunkin Donuts, Pizza Hut, Domino Pizza, Shakeys Pizza, Kenny Rogers Roasters, Long John Silvers, Dairy Queen, TGIF, Chilis, Hard Rock Cafe, Planet Hollywood, Baskin Robbins, Haagen Dazs, Swensons, Famous Amos, Auntie Annes, Outback Steak House.
According to Franchise Act 1998, all franchisers that are selling their franchises in Malaysia are required to register with the Registrar of Franchise (ROF), which is under the Ministry of Entrepreneur Development. Exemptions are granted to franchises that have been in operation in Malaysia prior to 1998. Therefore, U.S. franchisers that are selling their franchises in Malaysia will have to register with ROF first. They have to submit the following documents to ROF to get approval for registration: 1) letter of intent, 2) company profile, 3) sample of franchise agreement, 4) copy of latest audited accounts.
Officially, it takes one month to get an approval from ROF but normally it takes at least three months. It is usually easier for foreign franchises to get approval for registration with ROF compared to local franchises. However, there are incidences in which applications from foreign franchises had been rejected. When an application has been rejected, the franchisers can appeal.
Licensing Options
The requirement for obtaining a license is dependent on the product or service being provided by the company. For example, within the telecommunications industry, most firms are required to obtain a license but firms providing only broadband wireless services are not usually required to obtain a license. Furthermore, Malaysia has no uniform regulatory scheme governing licensing arrangements. Thus different government ministries or agencies may be responsible for licensing arrangements depending on the product or service. For example, firms providing telecommunication products or services may obtain licenses from the Malaysian Communications and Multimedia Commission (MCMC), while car manufacturers may be licensed through the Ministry of International Trade and Industry (MITI).
Pricing Issues
A number of factors should be taken into consideration when determining appropriate product prices. Some factors to consider are the exchange rate (3.8 RM = U.S. $1) and applicable taxes and duties. There may also be some government regulations for certain industries that affect the price charged to customers and other end-users. Another factor to consider is the standard of living in Malaysia. The country is one of the most affluent in the Southeast Asia region, which means that higher-priced products and services have a niche market. However, prices of general consumer goods should reflect the lower cost of living and purchasing power of the average Malaysian. Below is a table of some typical consumer goods and their prices.
Product
RM
U.S. $
Burger King Whopper
5.20
1.37
KFC (3-piece plate)
7.30
1.92
McDonald’s Big Mac
4.30
1.13
Pizza Hut (12-inch pizza)
22.00 - 25.00
5.79 - 6.58
A pair of Nike tennis shoes
325.00
85.53
Coach handbag
649.00
170.79
A can of Coke
1.06 - 1.22
0.28 - 0.32
A bottle of mineral water
1.30 - 5.89
0.34 - 1.55
A box of cornflakes
3.00 - 5.20
0.79 - 1.37
A loaf of bread
2.09 - 2.50
0.55 - 0.66
(Source: Malaysia Industrial Development Authority Web site)
Agents and Distributors
Many exporters designate a Malaysian-based trading company as their local sales agent responsible for handling customs clearance of imported goods, for dealing with established wholesalers and/or retailers, for marketing the product directly to major corporations or the government, and for handling after-sales service.
Distribution Channel Options
U.S. export wholesalers typically sell food and other consumer goods to Malaysian general import houses, which then handle distribution to supermarkets and other outlets.
U.S. exports to Malaysia move through a wide variety of sales channels, depending on the product or service. Major equipment sales to corporations in both the public and private sector require a local presence and local agents, as well as the active engagement of corporate leadership. This strategy has paid off for a number of U.S. firms, including Harris, FMC, Adtranz, and Honeywell, which have supplied passenger trams, jetways, and information systems to the Kuala Lumpur International Airport. Likewise, Parsons has provided design and engineering services to a local Malaysian firm building one of Kuala Lumpur’s two light rail transit systems. It should be noted that bumiputra (ethnic Malay) firms are often given preference in securing government contracts and privatization projects.
Oil and gas production equipment is purchased directly from suppliers such as Petronas, the Malaysian national oil company, and a few other major U.S. and third-country companies. Capital equipment is almost always handled by in-country representation, either through locally hired firms or a corporate representative in Malaysia. Electronic components are purchased directly from the U.S. by major U.S. and other multinational companies with manufacturing facilities in Malaysia. Much of that business is intra-firm. A large number of retail outlets and local and international consulting companies handle computer software. Many software companies have offices and joint ventures in Malaysia.
Marketing Factors
When marketing general consumer goods, U.S companies should keep in mind the cultural norms and standards of the Malaysian population, as well as the fact that Malaysia is a multiethnic country (Malays, Chinese, and Indians constitute 90% of the population, while the other 10% is composed of various indigenous groups). For example, a majority of the population is Muslim which means that certain food products must be “halal” (meaning lawful and permissible to use/consume in Islam) in order to appeal to a larger market. It is also advisable to conduct some research on the possible implications of advertising or promotional activities before initiating them in Malaysia.
U.S. food and other consumer goods are primarily marketed to the rapidly growing urban middle class, and so tend to occupy the upper end of the local retail price spectrum. U.S. firms in the retail sector include Avon, Toys R Us, Hallmark, Levi’s, and others. While value for dollar/ringgit is important, the “brand name” status of certain products appeals to a segment of Malaysians with a higher level of purchasing power. However, the same techniques used to market upscale goods and services in the U.S. may not be as effective in Malaysia.
Sales of equipment and material for a specific industry, such as electronics, depend heavily on specialized trade fairs, publications, and visits by company representatives. Sales to the government or for large-scale projects involving major equipment require extensive high-level contact by local representatives and visiting company representatives. Major companies with investments in Malaysia or interest in significant export sales often also engage in continuing programs of company image building through articles and advertising in local business journals, sponsorship of conferences and other events, and participation in public-private sector consultative bodies.
U.S. exporters face strong competition from producers such as China, Australia, India, Thailand, Holland, New Zealand, and Indonesia when marketing agricultural products. Although the Malaysian market is price sensitive, price is not the only factor that determines the success of U.S. exporters operating within the Malaysian agricultural market. Developing strong business relationships with local industry players (including importers), maintaining the availability and the quality of the produce, effective promotional campaigns, and targeting the right markets are other important marketing factors to consider when operating in Malaysia.
Advertising Options
There are four nationwide TV channels in Malaysia: two government channels (TV1 and TV2) and two private channels (TV3 and ntv7). Most television channels broadcast programs in the local language (Bahasa Malaysia), as well as in English, Mandarin, and Tamil. ASTRO (a direct-to-viewer satellite service) is also available in the country.
Malaysia has several English-language newspapers, the largest being the New Straits Times and the Star. The primary business-oriented paper is the Business Times, published by the New Straits Times group. The major Malay-language newspapers are Utusan Malaysia and Berita Harian, while the largest Chinese papers are Sin Chew Pit Poh and Nanyang Siang Pau. There are also Tamil and other language newspapers. Business-oriented magazines include Malaysian Business, Malaysian Industry, and the Malaysian Investor. Published news on Malaysia can be accessed through various sites including: www.malaysianews.net and www.asiadragons.com/world/malaysia.
Advertising approaches differ according to the market sector. For consumer goods, advertising techniques include the full range of television, radio, newspaper, outdoor advertisements and other approaches. However, due to health/religious concerns, there are prohibitions on most types of advertising for tobacco and alcoholic beverages.
Supplying Customer Service
Malaysian customers, both corporate and individual, expect high-quality sales service and after-sale customer support like many other customers in markets worldwide. While it is not often necessary to establish a local branch or subsidiary, it is usually crucial for U.S. companies to have a local agent (especially those that are interested in exporting products or operating services on a continual basis). This agent should be available for clients to contact immediately should any problems arise.
Government Procurement
Sales to the government require a local agent and/or a joint venture partner. Additionally, direct involvement by the U.S. company (including its senior leadership) and demonstrations of long-term commitment to the local market are essential for contracts of significant size. Offsets and/or technology transfer are usually an integral part of any large deal. Prices on major government projects tend to be negotiated, often after a bidding process has narrowed the range of potential candidate suppliers.
The Government of Malaysia is interested in attracting foreign investment and encouraging companies to establish offices in Malaysia to service both the local and regional market. (The Malaysian Industrial Development Authority (MIDA) has 5 offices in major cities in the U.S.). When considering bids on major items, there appears to be a definite government preference for companies with a local presence. The Multimedia Development Corporation (MDC) has publicly announced that bids from firms investing in the MSC will receive priority consideration when the government awards major contracts associated with development of the corridor (i.e., flagship applications). Microsoft and Electronic Data Systems have been awarded an “electronic-government” project, while Motorola and Unisys successfully bid on the “smart payments card” and projects as part of a consortium with other local companies. Companies represented by offices outside of Malaysia are often at a disadvantage in such major competitions or in establishing long-term markets with major private sector firms, especially in the architecture, construction management, and engineering sectors. A local presence usually ensures that the customer will have access to after-sales service and follow-up, which are greatly valued by Malaysians.
Import and Export Regulation Risks
Within the Government of Malaysia, the Ministry of International Trade and Industry (MITI) and the Ministry for Domestic Trade and Consumer Affairs (MDTCA) hold primary responsibility for the formulation and implementation of trade regulations and policies. Information about licensing and tariffs is available from the Customs Department. Their Web site is www.customs.gov.my. Malaysia follows the Harmonized Tariff System (HTS) for the classification of goods.
Free Trade Zone Options
Malaysia is a member of the ASEAN Free Trade Area (AFTA), which aims to reduce trade barriers among the member countries (Malaysia, Indonesia, Singapore, Thailand, the Philippines, Brunei, Vietnam, Laos, Burma, and Cambodia) over a 15-year period.
Tariffs
Tariffs are the main instruments used to regulate the importation of goods in Malaysia. Import duties range from 0% to 300%. The higher rates apply to luxury goods and protected sectors, such as automobiles. The level of tariff protection is generally lower on raw materials and increases for those with value-added content or which undergo further processing. Seventeen percent of Malaysia’s tariff lines (principally in motor vehicle, construction equipment, forestry, logging, agricultural, and minerals sectors) are also subject to non-automatic import licensing, designed to protect import-sensitive or strategic industries. Over the past few years, the government has reduced high import duties on selected goods that had been imposed to protect local producers from import competition. The government also harmonized the import duties on selected intermediate and finished goods in order to avoid anomalies and to reduce the cost of doing business.
Imports
Taxes
Tariffs on leaf tobacco, cigarette products, alcoholic beverages, and some processed and high-value food products remain high. The sales tax for tobacco is 25% and for alcohol 20%.
In addition to import dut
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