KUALA LUMPUR, Oct 21 — Industry players are hoping that Budget 2021 will offer more assistance and matching grants, especially those that would support small and medium enterprises (SMEs) and micro SMEs’ (MSMEs) digital adoption, as well as tax waivers to help them ride on the current headwinds.
SME Association of Malaysia’s president Datuk Michael Kang said while digital adoption is crucial for businesses across the board, the focus on SMEs and MSMEs is particularly important as they have been badly hit by the Covid-19 health crisis.
“A cohesive and structured approach is needed to support digitalisation and for them to change their way of doing business,” he told Bernama in an interview recently.
Among other things, digital adoption would help SMEs and MSMEs to tap on the various available platforms, including the Halal Development Corporation (HDC)’s Halal Integrated Platform (HIP), an online trading platform which is expected to be launched in the first quarter of next year.
“HIP will be the largest online trading hub that brings together 200,000 local SME companies involved in the production of halal products and services.
“With this virtual platform, the business conducted is borderless and it encourages internationalisation and trade across borders and countries,” said HDC chairman Datuk Mahmud Abbas.
On September 28, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz said the government will facilitate the acceleration of the SMEs’ digital adoption under Budget 2021 that will be tabled in the Parliament on November 6.
He said records have shown that crucial technological and digital migration have yet to hit critical mass among SMEs.
“We need to raise awareness that with digitalisation, SMEs can have a bigger market reach and go regional, and how our financial institutions can support them in this process,” he said.
SMEs make up 98.5 per cent of businesses in Malaysia, providing more than five million jobs and contributing over RM500 million to the nation’s gross domestic product (GDP), while the halal industry has 230,000 players, including multinational companies and SMEs.
Meanwhile, Bank Muamalat Malaysia Bhd economist Izuan Ahmad said the government should continue to provide support for automation as well, building on the foundations laid by the Prihatin Rakyat Economic Stimulus Package (Prihatin), Prihatin SME PLUS, the National Economic Recovery Plan (Penjana), and the Prihatin Supplementary Initiative Package (Kita Prihatin) to encourage transition among SMEs.
“Initiatives such as the BNM Special Relief Fund (SRF Covid-19) and Penjana Tourism Fund (PTF) should be continued as the impact from the pandemic may be prolonged,” he said.
Meanwhile, the Small and Medium Enterprises Association (Samenta) Malaysia chairman Datuk William Ng hopes that, in addition to the extension of the financial initiatives, the government would also top-up the digitalisation matching grant.
He also suggested for the government to introduce a “Work-with-SMEs” incentive for Malaysians who have been unemployed for three months or were retrenched during the pandemic and who have successfully applied to work with SMEs.
“We propose for the amount to be set at RM 300 per month for 12 months, payable directly to the employees,” he said.
The association also hopes that the Ministry of Finance will consider a waiver of corporate tax for the first RM500,000 taxable corporate income, and waiver of corporate tax for incremental income in the financial year (FY) 2021 versus FY2020, he added.
Echoing Ng’s opinion, Dr Mohammad Tawfik Yaakub, University of Malaya Faculty of Economics and Administration’s senior lecturer said at the very least, SMEs would need long-term and interest-free capital injections.
He opined that the government, via the Ministry of Communications and Multimedia and the Ministry of Entrepreneur Development and Cooperatives, should get involved in transforming the marketing and entrepreneurship platforms.
This can be done by introducing incentives such as tax exemptions, waiving business registration and business registration renewal fees for companies which conduct their business online, as well as setting up localised digital marketing centres for various products by utilising existing facilities.
— Bernama
