Private companies should keep up with regulatory changes: Deloitte

PETALING JAYA: Malaysian private companies should keep up with changes in the regulatory requirements, as it could pose risks and threats to their businesses.

In its inaugural report “Global perspectives for private companies: Plans, priorities, and expectations”, Deloitte Private highlighted that increased regulatory requirements as an area that local private companies should pay more attention to.

Deloitte Malaysia Private Wealth executive director Thin Siew Chi said the significant changes to tax frameworks in recent years have impacted most businesses, and private companies should not overlook the importance of adequately managing their tax risks resulting from these changes in regulatory requirements.

“Managing your tax affairs is no longer a mere compliance activity, but also about having the preparedness to meet the multiple challenges of greater transparency and increased information sharing among tax authorities, more rigorous regulatory scrutiny/enforcement, and addressing the technology gap in tax function operations,” she added.

To counter these risks, Thin said 35% of respondents are focused on increased productivity, while 33% of respondents are aiming to develop new products and services and grow existing markets, respectively.

In the context of the Malaysian market, the consulting firm said it sees private companies facing great challenges but greater opportunities as well amidst the global environment.

Surveying almost 1,900 executives in 30 countries, the majority of respondents expect revenue, profits, productivity, and capital investments to increase in the year ahead.

Additionally, 45% expect to hire more full-time employees. Despite these expectations, 53% of respondents perceive a greater level of uncertainty around their future business prospects.

Furthermore, executives worldwide consistently cited geopolitical uncertainty as a top risk to growth, while respondents from each region identified market disruptors, foreign exchange fluctuations, weaker domestic market demand, increased regulatory requirements and technology costs as principal threats.