2019 Budget: SMEs get major boost

NST Online

2 November 2018

2019 Budget: SMEs get major boost

KUALA LUMPUR: The small and medium entreprises (SMEs), which account for 98.5 per cent of businesses in Malaysia, have received a major boost from the 2019 Budget, industry executives said.

There were an array of goodies such as initiatives to exempt specific business-to-business service tax, and a credit system for small manufacturers who import raw materials and intermediary goods.

Perbadanan Usahawan Nasional Bhd (PUNB) welcomed the RM200 million allocation for the wholesale and retail industry, as well as for the purchase of business premises to be rented to Bumiputera SMEs.

PUNB chairman Datuk Hazimah Zainuddin described the budget as “caring, entrepreneur-friendly and well-balanced” for the economy to progress.

"This 2019 Budget is realistic and is expected to continue to develop more Bumiputera and local entrepreneurs. The allocation received will be well-utilised in accordance to the PUNB agenda which is to empower Bumiputera entrepreneurs," he said when contacted by NSTP Business here yesterday.

Small and Medium Enterprises Association Malaysia policy and government relations chairman Datuk William Ng said the association members were happy to note that the government is introducing the credit system for sales tax deduction and SST exemption for specific services provided by registered businesses to other registered businesses.

”While we are dissapointed that the tax reduction scheme for incremental income of SMEs is not retained, we are grateful that the government has incorporated a number of measures to assist SMEs,” Ng said.

These included the RM100 million fund for TEKUN, the RM20 million budget for Buy Malaysian Product Campaign, the RM210 million fund to promote Industry 4.0, the RM2 billion Green Technology Financing Scheme and the RM 2 billion soft loan for modernisation under the Business Loan Guarantee Scheme.

”The association is especially excited with the proposed National Fiber Optic and Connectivity Plan (NFCP) which has been allocated RM 1 billion to develop broadband infrastructure across the country. This would make our economy more competitive, and opens up opportunities within the digital economy for SMEs across the country,” he added.

Meanwhile, the Ministry of Entrepreneur Development (MED) hopes to see more opportunities for entrepreneurs and SMEs in the services sectors as a result of the government’s initiative to impose taxes on imported services.

“MED also views this measure as integral in creating a level-playing field between online and offline providers of services. MED is particularly pleased that the government will offer financing schemes with government guarantees and subsidized interest rates for SMEs.

“These loans and guarantee will spur the economic growth of SMEs as these enterprises expand and further invest in their businesses. Rubber and oil palm smallholders, who are mostly microenterprises, will also benefit from the assistance and positive spill-over effects,” the ministry said in a statement.

Malaysia External Trade Development Corp (Matrade) said it would boost and add value its collaboration with stakeholders in key industries emphasised in the budget namely aerospace, halal, e-Commerce, logistics, creative sector and services.

“The 2019 Budget gives a strong focus on capacity building for Malaysian SMEs and mid-tier companies, in particular women-owned and youth-owned businesses,” it said.

Universiti Kebangsaan Malaysia Entrepreneurship Development Centre and SMEs faculty director Professor Datin Dr Shamsubaridah Ramlee said while there was an increase of allocation for SMEs, availability of loans from the banks are still an issue and needs to be addressed.

“There seems to be an increase of allocation for the SMEs, but availability of funds and the accessibility to it are two different things. The loan can be available but if commercial banks have to practice prudent banking among these risky SMEs, availability will still be an issue.

Web source: https://www.nst.com.my/business/2018/11/427731/2019-budget-smes-get-major-boost