Tax reforms will help reduce inequality in Malaysia: World Bank

Business

February 6, 2025

KUALA LUMPUR (BERNAMA) – Malaysia needs tax reforms to raise additional revenues for reducing inequality, according to the World Bank.

Its latest report titled ‘A Fresh Take on Reducing Inequality and Enhancing Mobility in Malaysia’ said that the country needs to raise more revenues through both direct and indirect taxes.

“Malaysia’s (public) revenues not only lag the revenues of upper middle-income countries (UMICs) and high income country (HIC) peers but also the low middle income country (LMIC) average. The biggest consequence of low revenues is to limit what the country can spend,” said the report, which was developed in collaboration with the Economy Ministry and Department of Statistics Malaysia.

The World Bank said international data suggest that there is a relatively fixed cost of running a government, with total spending apart from that on health, education and social protection being relatively fixed as a percentage of gross domestic product (GDP) across all income levels.

“This means that as new revenues are raised, fiscal space is created for greater social spending,” it said.

According to the World Bank, income inequality in Malaysia trended down between 1970 and 2022, but the decline has stalled in recent years.

Inequality, as measured by the Gini index, fell from 45 in 2004 to 40 by 2014. It remained at that level through 2019 – before the COVID-19 pandemic – and declined slightly to 39, according to the most recent data from 2022.

“While this is not insignificant, Malaysia’s Gini remains higher than that seen for the advanced economies that it wishes to emulate,” the World Bank said.

The Bretton Woods institution said the personal income tax (PIT) could be made more progressive and tackle inequality at the top of the income distribution.

It said that Malaysia’s heavy reliance on direct taxation is progressive, but capital incomes are not taxed, and direct taxation through the PIT is low at less than 3.0 per cent of GDP.

Estimates from Malaysia’s PIT Policy Microsimulation Model suggest that lowering the taxable income thresholds and applying higher rates at the upper income brackets could increase PIT revenue by up to MYR2.5 billion-MYR2.8 billion in 2024, while imposing a cap on relief could add up to at least another MYR1.1 billion.

India says OpenAI chief willing to collaborate on AI

Business

February 6, 2025

NEW DELHI (AFP) – India’s technology minister said yesterday that OpenAI chief Sam Altman was “willing to collaborate” with the world’s most populous country in its bid to develop its own cut-price artificial intelligence (AI) systems.

Ashwini Vaishnaw said he held a “super cool discussion” with Altman in the capital New Delhi, where they talked about India’s “strategy of creating the entire AI stack” of graphics processing units (GPU), models and apps.

Vaishnaw said Altman was “willing to collaborate with India on all three”, without giving further details.

Altman said that India was OpenAI’s second biggest market, with its users in the country of 1.4 billion people tripling in the past year.

“India is an incredibly important market for AI in general and for OpenAI in particular,” Altman told a closed-door meeting of Indian tech developers, in comments broadcast by the Press Trust of India news agency.

“I think India should be one of the leaders of the AI revolution,” Altman said.

“It’s really quite amazing to see what the country has done, in embracing the technology and building the entire stack of things on top of it.”

OpenAI was the firm that brought generative models to public consciousness in 2022 with the launch of ChatGPT.

Vaishnaw referenced India’s space mission, which has included landing an unmanned craft on the Moon in 2023, matching the achievements of established space powers at a much cheaper price tag.

“Our country sent a mission to the Moon at a fraction of the cost that other countries did,” Vaishnaw said, in a speech alongside Altman.

“Why can’t we do a (AI) model that will be a fraction of the cost?”

Altman told Vaishnaw that he was “really excited to do a lot more together”.

Indian Prime Minister Narendra Modi is to co-host an artificial intelligence summit in France from February 10-11, which Altman is expected to attend.

Altman is on a whirlwind tour of Asia, and signed a deal in South Korea on Tuesday with tech giant Kakao.

The United States firm is seeking new alliances after the release of Chinese rival DeepSeek last month shook the global AI industry.

South Korea to launch alternative stock trading platform next month

Business

February 6, 2025

ANN/THE KOREA HERALD – South Korea’s financial regulator announced yesterday that a new alternative trading system (ATS) will be introduced in March, aiming to enhance efficiency and convenience in securities trading. The move marks a significant shift in the country’s stock market landscape.

Currently, the Korea Exchange (KRX), established in 1956, serves as the nation’s sole stock market operator. However, the Financial Services Commission (FSC) revealed that a secondary stock trading platform, Nextrade (NXT), will soon be launched to provide investors with an alternative marketplace.

NXT will operate for 12 hours daily, from 8am to 8pm, significantly longer than the KRX’s trading hours of 9am to 3.30pm. The platform will also feature lower transaction fees and a different system for stock bid and ask prices.

Short-selling will be permitted on NXT but restricted during pre-market and after-market trading hours, according to the FSC. Additionally, the platform will adopt key market stabilisation measures from KRX, including daily stock price limits and circuit breakers. A total of 32 brokerage firms are set to participate in NXT, with approximately 800 companies expected to be listed on the secondary exchange. The launch of the new trading system is expected to bring greater competition and innovation to South Korea’s financial markets.

The Korea Exchange headquarters in western Seoul, South Korea. PHOTO: THE KOREA HERALD

Philippine inflation rate steadies at 2.9pc in January

Business

February 6, 2025

MANILA (XINHUA) – The Philippines’ annual inflation rate remained at 2.9 per cent in January, the same annual growth rate recorded in December 2024, the Philippine Statistics Authority (PSA) said yesterday. PSA chief Dennis Mapa told a news conference that the food and non-alcoholic beverages, which registered an inflation rate of 3.8 per cent in January, contributed 50.3 per cent to the overall inflation during the month. Other main contributors to the January inflation were housing, water, electricity gas and other fuels, as well as restaurants and accommodation services, said Mapa.

Due to the lingering effects of last year’s consecutive typhoons, food inflation at the national level rose to four per cent in January from 3.5 per cent in December 2024.

The index of rice recorded an annual decline of 2.3 per cent during the month from a 0.8-per-cent annual increase in the previous month, the PSA data showed.

The National Economic and Development Authority Secretary Arsenio Balisacan said the government continues to take “proactive steps to make rice prices more affordable”.

Balisacan reiterated that reducing food inflation remains one of the government’s most pressing priorities.

Wind power giant Vestas profit soars on record orders

Business

February 6, 2025

COPENHAGEN (AFP) – Vestas, the world’s biggest wind energy company, said yesterday its net profit soared sixfold in 2024 as it logged a record number of orders for its turbines.

The Danish group’s after-tax profit jumped from EUR77 million in 2023 to EUR499 million (USD520 million) last year. Revenue grew 12 per cent to EUR17.3 billion.

“Vestas continued its positive trajectory in 2024 and achieved its outlook for the year,” chief executive Henrik Andersen said in a statement.

He added that “the year didn’t evolve as expected” but “Vestas leaves 2024 stronger than we entered it” thanks to all-time high orders and an “extraordinary turnaround” in its power solutions division.

The value of its order backlog reached EUR68.4 billion last year, representing 21.7 gigawatts of onshore wind power and 7.5 GW of offshore energy.

Vestas is banking on strong growth in offshore wind.

The company secured its first offshore wind project in the United States last year and saw expansions in Europe along with the emergence of new markets such as Japan and South Korea.

But Donald Trump’s return to the White House could prove a challenge to the sector as the US president temporarily froze federal permits and loans for all offshore and onshore wind projects.

Vestas is forecast revenue of between EUR18 billion and EUR20 billion in 2025.

“The need for energy security has become ever more apparent, and the need to build resilience by scaling renewables continues,” the company said in its annual report.

Alcaraz battles through in first match since Australian Open

Sports

February 6, 2025

THE HAGUE (AFP) – Spanish tennis star Carlos Alcaraz battled through against local hero Botic van de Zandschulp at the Rotterdam Open on Tuesday, his first match since quarter-final heartbreak at the Australian Open.

The top seed had to dig deep to overcome the wildcard ranked 81 places below him, eventually coming through the first-round clash 7-6 (7-3), 3-6, 6-1 in nearly three hours.

“It was a really difficult match. I had to get through some really difficult moments,” Alcaraz said.

“I started the match a little bit nervous, making some mistakes. I let him dominate the match, play his style,” added the Spaniard.

Van de Zandschulp stunned Alcaraz with a straight-sets win at last year’s US Open and the higher-ranked man initially struggled to find his range on the slow Rotterdam indoor surface.

A series of uncharacteristic errors handed the Dutchman several breaks of serve and Alcaraz became increasingly frustrated, chuntering at his box and the chair umpire.

Van de Zandschulp had a set point at 5-4 but contrived to serve a double fault. Alcaraz sniffed an opportunity and he brought the match back on level terms at 5-5 with a powerful forehand drive.

Spain’s Carlos Alcaraz reacts as he competes against Netherlands’ Botic van de Zandschulp during their men’s singles round of 32 match at the ATP Tour Rotterdam Open tennis tournament at the Rotterdam Ahoy in Rotterdam. PHOTO: AFP

Spain’s Carlos Alcaraz arrives for his men’s singles round of 32 match against Netherlands’ Botic van de Zandschulp at the ATP Tour Rotterdam Open tennis tournament at the Rotterdam Ahoy in Rotterdam. PHOTO: AFP

The set felt destined for a tie-break and sure enough, the pair were soon locked at 6-6. Alcaraz saved his best form for the key moment, unleashing several winners to take the tie-break 7-3.

The second set was also hard-fought, going on serve until the sixth game when an errant Alcaraz backhand gifted Van de Zandschulp a break and a 4-2 lead.

The local favourite served for the set at 5-3 and levelled the match at one set all as Alcaraz hit yet another forehand wide to the delight of the partisan home crowd.

Two double faults and a wild forehand swung the match back in the Spaniard’s favour in the decisive set as he broke at the first time of asking, racing into a 3-0 lead. The break seemed to knock the energy out of Van de Zandschulp and he lost his serve again to give the top seed the chance to serve out at 5-1.

Alcaraz sealed the match with a delicate forehand drop shot volley, the relief palpable on his face as he shook hands at the net.

“A bit up and down on my side. I have to work to see where my weaknesses were in this match to be better in the next round,” he said.

Alcaraz is seeking to become the first Spaniard to triumph in Rotterdam but there are several obstacles potentially in his path, notably former champion Daniil Medvedev.

The Russian number two seed came through a gruelling encounter with veteran three-time Grand Slam champion Stan Wawrinka on Monday.

Also through into the second round on Tuesday was Australia’s Alex de Minaur, who has happy memories of Rotterdam, finishing runner-up last year to world number one Jannik Sinner.

De Minaur overpowered Belgium’s David Goffin 6-2, 6-4 to book a second-round clash with Czech teenager Jakub Mensik.

Another former Rotterdam champion through with little difficulty was Russia’s Andrey Rublev, who beat China’s Zhang Zhizhen 6-3, 6-4.

Global shares trade mixed as investors weigh impact of US-China tariffs

Business

February 6, 2025

TOKYO (AP) – Global shares were trading mixed yesterday as markets mulled the impact of tariffs being imposed by the United States (US) and China.

France’s CAC 40 shed 0.3 per cent in early trading to 7,881.94, while Germany’s DAX fell 0.5 per cent to 7,881.94. Britain’s FTSE 100 lost 0.2 per cent to 8,558.31. US shares were set to drift lower with Dow futures falling nearly 0.2 per cent to 44,620.00. S&P 500 futures slipped 0.5 per cent to 6,034.25.

Earlier in the global day in Asia, Japan’s benchmark Nikkei 225 recouped earlier losses and was little changed, finishing up less than 0.1 per cent at 38,831.48.

Among Japanese issues, the stock price of Honda Motor Co shot up 8.2 per cent after Japanese media reports said its talks to set up a joint holding company with rival Nissan Motor Corp were unravelling. Nissan stock tumbled 4.9 per cent.

Australia’s S&P/ASX 200 rose 0.5 per cent to 8,416.90. The Hang Seng dropped 0.9 per cent to 20,597.09, while the Shanghai Composite lost 0.7 per cent to 3,229.49.

South Korea’s Kospi jumped 1.1 per cent to 2,509.27, as investors found bargains after the recent price dips and found optimism from the overnight Wall Street rally.

Some analysts see tariffs on China as separate from Trump’s moves against other trading partners. Trump may be more likely to keep tariffs on China longer, as he did in his first presidential term, to separate the US more.

Trump is pressing ahead with a 10-per-cent tariff on US companies importing things from China. And China also announced its own tariffs on some US products and an antitrust investigation into Google.

China’s 15 per cent tariff on US coal and liquefied natural gas products, as well as a 10-per-cent tariff on crude oil, agricultural machinery and large-engine cars imported from the US won’t take effect until Monday. That leaves time for negotiations between Trump and Chinese President Xi Jinping.

“Trade tensions haven’t exploded yet, but they’re simmering dangerously close to a full boil, and anyone brushing them off does so at their own risk,” said managing partner at SPI Asset Management Stephen Innes.

Trump agreed to delay his taxes on US imports of Canadian and Mexican products for a month. Some traders hope Trump would likely be turned off by the damage Wall Street would take if a worst-case, long-term trade war were to occur. Trump has pointed in the past to the stock market as a real-time measure of his performance.

But a trade war is still possible, and some analysts said more swings may be coming because Trump’s threats should be taken seriously.

Currency traders watch monitors at a foreign exchange dealing room in Seoul, South Korea. PHOTO: AP

Estee Lauder to cut up to 7,000 jobs as sales slide

Business

February 6, 2025

NEW YORK (AP) – Estee Lauder may trim as many as 7,000 jobs by fiscal 2026, more than 11 per cent of its workforce, after the global beauty cosmetics maker lost money in its most recent quarter as reported a six-per-cent sales slump. The New York company behind such brands as MAC, La Mer and Aveda tempered its profit outlook as the economies of China and Korea slow.

Estee Lauder expects to book restructuring and other charges related to the job cuts of between USD1.2 billion and USD1.6 billion, before taxes. As of June 30, 2024, Estee Lauder had roughly 62,000 employees worldwide, according to the company’s latest annual filing.

“We are significantly transforming our operating model to be leaner, faster, and more agile,” said Chief Executive Officer Stéphane de La Faverie, who became the company’s top executive last month.

The company posted sales of USD4 billion in the latest quarter, down from USD4.28 billion in the same period last year.

Estee Lauder now expects profit per share between 24 cents and 34 cents in the current quarter, far below the 61 cents per share that Wall Street had been expecting, according to FactSet.

Shares of The Estée Lauder Companies Inc fell 16 per cent to USD69.47, its biggest one-day drop in nearly two years.

Estee Lauder products at a store in Boston, United States. PHOTO: AP

Undav sends Stuttgart into German Cup final four

Sports

February 6, 2025

STUTTGART (AFP) – A 29th-minute goal from Stuttgart striker Deniz Undav was enough for a 1-0 home win over Augsburg on Tuesday, sending them through to the German Cup semi-finals.

“It wasn’t our strongest game but at the end it was enough,” Undav told Germany’s ARD of the “dirty” win.

Stuttgart coach Sebastian Hoeness, who has turned the club’s fortunes around since arriving in the middle of a relegation battle in April 2023, also praised his side’s fight.

“With all the games we’ve played, it certainly wasn’t a performance to savour, but the win was deserved.”

Stuttgart, surprise runners-up in the Bundesliga last season a year after narrowly avoiding relegation, were sloppy early as underdogs Augsburg looked to reach the semis for just the second time.

The hosts began to warm into the game, with Angelo Stiller chipping the Augsburg defence and finding his Germany teammate Undav, which was denied by visiting ‘keeper Nediljko Labrovic with 26 minutes gone.

Undav put the home side in front three minutes later when he played a clever one-two with former Augsburg striker Ermedin Demirovic, before blasting through Keven Schlotterbeck’s legs and into goal.

Undav, who made his loan from Brighton and Hove Albion permanent in the summer, now has 10 goals in 24 games in all competitions.

Augsburg lacked class going forward and created few chances, outside of Mert Komur forcing Stuttgart goalie Alexander Nuebel into a desperation save with 71 minutes gone.

The victory came after three straight defeats in all competitions for Stuttgart, including Wednesday’s 4-1 home loss to Paris Saint-Germain which ended their Champions League campaign at the group stage.

Three-time winners, Stuttgart last lifted the German Cup in 1997 and have not won a title since the 2006-07 Bundesliga.

Yesterday, holders Bayer Leverkusen host bitter derby rivals Cologne.

The remaining quarter finals will be held late in February, with RB Leipzig – who have won two of the past three German Cups – host 2015 winners while six-time champions Werder Bremen travel to third-division Arminia Bielefeld.

Stuttgart’s German forward Deniz Undav plays the ball during the German Cup (DFB Pokal) quarter-final football match against FC Augsburg in Stuttgart, southwestern Germany. PHOTO: AFP

England consider using Smith duo in backline in Six Nations clash

Sports

February 6, 2025

LONDON (AFP) – England could unleash playmakers Marcus Smith and Fin Smith in the backline against France in a bid to revive their Six Nations title challenge.

After losing 27-22 to Ireland in their Six Nations opener last weekend, England have no margin for error when France visit Twickenham on Saturday.

Despite the high-stakes, head coach Steve Borthwick could be ready to make a bold selection gamble.

Marcus Smith has been England’s first choice fly-half since the 2023 World Cup.

But he is in contention to be moved to full-back for Saturday’s showdown to accommodate Fin Smith’s potential promotion to the starting line-up. Northampton star Fin Smith has made all seven of his previous Test appearances as a replacement.

He would have responsibility for directing the backline, with Marcus Smith providing a counter-attacking threat from 15, a position he first filled at the World Cup and has occupied in cameos since.

Selecting two of English rugby’s most creative talents together would offer an extra dimension with the ball, although Freddie Steward’s demotion at full-back would also rob the team of their aerial ace.

“Marcus is obviously another set of eyes that are very opportunistic.

‘Where’s the space? Who can I beat?’,” England attack coach Richard Wigglesworth said on Tuesday.

“But Freddie Steward brings an incredible level of high ball skill and a kick return that is incredibly decisive on the way back.

“There are competing demands that you are trading off all the time.

“We are blessed with having three 10s that can all play international rugby to a high level.

“Fin has had less chance than the rest at the moment, but he is really clear with his game, he is confident without being arrogant and wants to get better.

“He has all the things that you associate with top 10s. He’s really clear with what he wants and how to best position the team.”

Borneo Bulletin OnlineThe Independent Newspaper in Brunei Darussalam, Sabah and Sarawak

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