PETALING JAYA: Businesses want better initiatives for small and medium enterprises and allocation for trade and investments under the Budget 2023, which is expected to be tabled earliest by January.
This is in the wake of Budget 2023, which was tabled in November but never passed.
Federation of Malaysian Manufacturers (FMM) president Tan Sri Soh Thian Lai said Budget 2023 should be further boosted to support trade and investment initiatives to expand market access given the impact of Covid-19 alongside supply chain disruptions.
“Given the importance of free trade agreements in supporting the expansion of export opportunities for industries, negotiation with the European Union should resume while ensuring there is no withdrawal from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),
“There should also be accessibility towards incentives and fiscal support to facilitate export promotion activities,” he said.
Soh, who is also the National Chamber of Commerce and Industry of Malaysia president, said special tax rebates could be introduced for projects that use local building materials such as ceramic and roofing tiles to support the development of local producers.
“The Brand Promotion Grant should also be reinstated to complement manufacturers’ efforts to promote Malaysian brands aggressively during this recovery period as many have lost their customers and markets and need to reestablish new markets.
“In tandem, vendor development programmes can be enhanced and supported to build the capacity of SMEs to become Large Local Companies,” he said.
The RM100mil allocation for the Domestic Investment Strategic Fund (DISF) is also insufficient to support business recovery and should be further increased, Soh said.
He added that more high speed broadband and 5G services should also be equipped in industrial areas to support the digital and technological transformation of industries.
“Allocations for the Industry4WRD – Readiness Assessment and Intervention programme should also be increased to RM100mil,” he said.
Soh said tax reductions for SMEs should also be pursued by either lowering corporate tax rates to between 13% or 15% for the next two years given the present challenging business environment.
“Alternatively, a flat corporate tax rate of 17% should be considered for SMEs. Incentives in the form of lower than normal interest rates should also be made available for SMEs that have invested or are planning to do so for sustainable operations and approaches, if they qualify.
“There should also be double tax deduction incentives for SMEs to cover ESG related initiatives,” he said.
Support should also be given towards building a pool of highly skilled workforce and reducing dependence on foreign workers, Soh said.
SME Association of Malaysia national president Ding Hong Sing said the new government should consider allocating funds to help SMEs incorporate digitising and automation initiatives.
“This way, we can reduce the need for foreign workers while also increasing SMEs output and potentially increasing imports.
“The money saved (through the automation process) can instead be used to pay more lucrative salaries for local workers,” he said.
Ding said a 100% zero interest rate policy could also be included for Budget 2023 as a means to assist SMEs in purchasing machines for automation processes.
“Given that cash flow is tight (for SMEs), cash loans should be considered for them in Budget 2023.
“This can be implemented through zero per cent interest rates in the first year with a 2% interest implemented in the second year, or whichever way the government deems best to help rejuvenate the SME sector,” he said.
“The government should also retain the reduction of SMEs income tax from 17% to 15% for its first RM100,000 earned as announced in Budget 2023,” he said.
Budget 2023 was tabled in Parliament on Oct 7 by then Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz but it was never passed before the 15th General Election was called.
