PETALING JAYA: Reinstatement of the Goods and Services Tax (GST) and helping struggling micro, small and medium enterprises (MSMEs) are in the Budget 2025 wish list for business communities.
But they also hope for incentives that can help the rakyat cope with the rising cost of living.
Associated Chinese Chambers of Commerce and Industry Malaysia treasurer-general Datuk Koong Lin Loong said B40 and M40 households should be given more tax relief to cushion increases in the cost of living.
“This can be done by increasing the personal tax relief to RM12,000 from the current RM9,000.
“The last revision was done 14 years ago in 2010,” he said in an interview.
He said parental care tax relief, which was provided for between 2016 and 2020, should be reintroduced and capped at RM2,500 each for both father and mother.
On e-invoicing, Koong said the government should consider making its participation voluntary for businesses with an annual turnover or revenue of RM500,000 and below when the system is fully implemented on July 1, 2025.
“An exemption was recently announced for companies with turnover of RM150,000 and below.
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“However, this threshold should be increased to RM500,000 and implemented on a voluntary basis first before gradually making it mandatory,” he suggested.
On the proposed carbon tax, Koong said Budget 2025 should provide clear guidelines and a timeline for the progressive introduction of the new tax regime.
This should also include clear guidelines on tax deductions on environmental, social and governance (ESG) related expenditure.
Malay Chamber of Commerce Malaysia president Norsyahrin Hamidon asked for more access to financing for bumiputra SMEs.
“More than 90% of funding from Mara is allocated for education. Funds should be channelled for business financing to spur growth.
“A dedicated RM1bil for financing entrepreneurship would be a strategic move,” he said when contacted.
Norsyahrin said the proposed merger of SME banks with the larger banks has caused unhappiness among the Malay and bumiputra economic communities looking for concrete policies to resolve their socio-economic challenges.
“This merger is of no strategic interest to SMEs and should be looked into again,” he added.
SME Association of Malaysia president Chin Chee Seong said he hopes Budget 2025 will include provisions to help SMEs as many are still facing financial challenges since the Covid-19 pandemic.
“I believe the government will present a tight budget for 2025 owing to limited revenue.
“Nevertheless, SMEs should be given some help as many of them are not in good shape despite the nation witnessing positive economic data for the second quarter of this year,” he said.
Chin suggested the government revive the GST to boost its coffers and allow it to better plan the annual budget aimed at spurring the economy.
On assistance for SMEs, he said the one-off Market Development Grant (MDG) for companies to promote their products abroad in trade shows or exhibitions should be increased.
He said the RM300,000 MDG amount was set many years ago and most companies have since used it up.
“The MDG should be increased to RM500,000 as there are companies that want to participate in trade fairs and exhibitions but exhausted their MDG years ago.
“The MDG would help these companies remain competitive globally while also helping increase the nation’s exports,” he added.
He also said the federal budget should include a special allocation to help educate and train SMEs on ESG, so that they can be prepared to deal with the carbon tax and ESG-related matters.
Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan said more should be allocated towards the Malaysia Digital Economy Corporation (MDEC) digitisation grant.
“At present, RM100mil has been set aside for the purpose with matching grants of up to RM5,000 provided to companies.
“This means that only 20,000 MSMEs or 2% out of the estimated 1.2 million MSMEs can benefit from this.
“The allocation for the digitisation grants should be increased by RM500mil,” he said.
Although micro-businesses with an annual turnover of less than RM300,000 make up about 70% of the business ecosystem, they have stagnated, said Nivas, calling for policies to be implemented to uplift them.
He said the automatisation grant should be increased from the current RM100mil to at least RM1bil if companies are to gradually wean off their dependence on foreign workers.
Nivas also suggested the reinstatement of the GST to help increase government coffers while improving tax efficiency.
Instead of the previous 6% GST rate, he said a 3% rate could be imposed to provide stable and predictable revenue for essential public services and infrastructural development.
