The construction industry hopes the government will lower import tax on machinery in Budget 2015 to boost productivity among businesses.

Construction Industry Development Board (CIDB) chief executive, Datuk Seri Dr Judin Abdul Karim, said the use of machineries would cut down dependence on manual labour.

“CIDB is working with the Ministry of International Trade and Industry on proposals to boost productivity of the businesses.

“The current import taxes of machinery equipment are as high as 20-25 per cent, and ideally they should be slashed to five per cent,” he said.

The construction industry reported the strongest growth across sectors in the first six months of the year at 14.3 per cent.

The government expected the momentum will continue into the second half and next year, fuelled by approved government projects and potential investments from the private sector.

President of Master Builders Association Malaysia (MBAM), Matthew Tee, said the reduction in import duties would lead to high productivity and encourage the industry players to invest in the high-capacity machineries.

“There are certain things that we have been requesting from the government since 2006, such as reduction in import duties on heavy construction machineries which are high compared to other Asian countries.

“MBAM is only asking for reduction of the duties on machineries that are not manufactured within Malaysia,” he said.

Tee said in some of the Asian countries the taxes were between five to zero per cent.

He said there would be no decline in terms of the government income with the reduction of the import duties as the reduction would encourage the industry players to buy more machineries.

In terms of property sector, AllianceDBS Research economist, Manokaran Mottain, hoped the government would announce measures to further cool down the high real estate prices in light of rising household indebtedness.

“Although the housing price index growth moderated to eight per cent in the first quarter this year, from 11 per cent in 2013, the affordability of residential houses, especially to first-time home buyers, is certainly an area of concern to the government,” he said.

He expected 1Malaysia People’s Housing Programme scheme targeted at first-time home buyers and Private Affordable Ownership Housing Scheme for affordable housing to continue in the Budget 2015.

As the current incentive of 50 per cent stamp duty exemption for first- time residential property buyers of up to RM400,000 is due to expire end-2014, Mottain said hoped the government would extend this incentive in line with the various housing affordability measures in place.