20121005 1015 Local & Global Economy Related News.

The government plans to reduce corporate taxes in the short to medium term to raise the country’s competitiveness as an attractive global business destination, said  PM Datuk Seri Najib Tun Razak. He said introducing a lower corporate tax regime in the future will ensure companies have more income for reinvestment to grow their businesses – a move which will further improve the dynamics and competitiveness of the country’s private sector. Malaysia’s corporate tax is currently at 25% (vs. 26% in 2008 and 27% in 2007), similar to Indonesia’s, while Singapore’s rate is at 17%, Thailand at 23% and Hong Kong at 16.5%. (Financial Daily)

The Inland Revenue Board (IRB) targets direct tax collection of RM117bn this year, Deputy Finance Minister Datuk Donald Lim Siang Chai  said yesterday. From 2008 to 2011, IRB's total direct tax collection was RM342bn, he said. Lim said IRB's moves to boost the collection include focusing on auditing of companies that are exposed to high risks and tax evasion, investigating those who have not declared their real income and focusing on the collection of stamp duties and real property gains tax. (BT)

The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, rose to an average of 216 points in Sep after remaining stable at 213 points in Aug, remaining close to levels reached during the 2008 food crisis. (Reuters)

US jobless claims rose to 367,000 in the 29 Sep week (a revised 363,000 in the earlier week), still less than the 370,000 level that analysts were expecting. (Bloomberg)

US factory orders fell 5.2% mom in Aug (a revised +2.6% in Jul), better than the consensus estimate of -6.0%. (Bloomberg)

The  US National Federation of Independent Business said the  net change in employment per firm slipped 0.23 last month after declining 0.05 in Aug, the third straight month of weakening. (Reuters)

The US Challenger Job-Cut report revealed that announced layoffs were at the 33,816 level in Sep (32,239 in Aug). (Bloomberg)

The European Central Bank (ECB) kept its main refinancing rate on hold at 0.75%, judging that for now there was no need to cut rates below what are already historic lows despite ongoing worries about the poor outlook for growth in the eurozone. No country has yet applied for the ECB’s so-called Outright Monetary Transactions or OMT programme, which faced fierce opposition from the Bundesbank and German commentators. (FT)

European Central Bank President Mario Draghi said the bank's new bond-buying program is ready to activate, and put the onus on vulnerable countries such as Spain to first seek and receive assistance from other euro-zone governments. (WSJ)

The Bank of England kept the main interest rate at a record low 0.50% and to stick by its current Quantitative Easing (QE) stimulus amount of 375 billion pounds ($604 billion, 467 billion euros). (CNA)

The International Monetary Fund won’t disburse its share of the Greek bailout if the country’s debt is not deemed sustainable  or if other creditors don’t pledge to fill a financing gap in the aid package, a fund spokesman said.(Bloomberg)

According to the new  2012 APEC Economic Policy Report, APEC economies have improved their  ease of doing business by 8.2% between 2009 and 2011. (CNA)

Indonesia’s foreign reserves rose to US$110.17bn in Sep (US$108.99bn in Aug). (Bloomberg)

India’s service sector purchasing managers’ index rose to 55.8 in Sep from 55 in Aug, the fastest pace in seven months. (Bloomberg)

India's cabinet approved raising the limit on foreign ownership of local insurance companies to 49% from 26%. It also permitted overseas investors to own up to a 49% stake in  domestic pension-fund managers—the first such investment that has been allowed. (WSJ)

Applications for Thailand’s Board of Investment privileges from Jan to Sep rose 97% yoy to  top  THB804bn, exceeding the set target of  THB800bn, whilst the number of projects rose from the same period last year by 21.6% to 1,302. (Bangkok Post)

The  Industrial Estate Authority of Thailand (IEAT) alerted industrial estate operators to get ready for upcoming  heavy rainfall as the agency expressed concerns about estates in eastern Bangkok where permanent dykes have not been built. (Bangkok Post)

Lower domestic interest rates could help cushion the economy from the heavier impacts of the global downturn next year, as local inflationary pressure is likely to decline, says  Bank of Thailand governor Prasarn Trairatvorakul. (Bangkok Post)

Vietnam’s National Financial Supervisory Committee proposed more attention be paid to the monetary market, warning in a recent report that the economy had seen  alarming signs when it came to  interest rates and  inflation. (Vietnam News)

The Asian Development Bank lowered its forecast for Vietnam’s growth this year to 5.1% (from 5.7% in the Apr estimate) and 5.7% for 2013 (from 6.2%) on the back of continued weakness in external markets and domestic credit. (Vietnam News)