The Edge Markets
21 October 2016
FMM: MORE FUNDS SHOULD HAVE BEEN ALLOCATED TO DEVELOP SMEs
KUALA LUMPUR (Oct 21): The Federation of Malaysian Manufacturers (FMM) welcomes the incentives for the development of small and medium enterprises (SMEs) in Budget 2017, but expressed disappointment that more funds had not been allocated to the sector’s growth.
“FMM welcomes the numerous programmes and incentives focused on the development of SMEs, in particular the export promotion funds, insurance credit facilities, the 2% rebates on interest rates charged to SME borrowers, the reduction corporate tax rate from 19% to 18%, extension of incentives for vendor development and additional schemes to support start-ups.
“All these programmes and additional funds are expected to boost further development and growth of SMEs and entrepreneurship, going forward.
“While FMM is happy with the above, we hope that more funds could have been allocated to develop SMEs,” said FMM president Tan Sri Saw Choo Boon in a statement.
In addition, FMM also looked forward to the further extension of reinvestment allowances and incentives to promote innovation, research and development (R&D), productivity and accelerated capital allowances for automation.
Saw said given the importance of water supply to support manufacturing activities, the development projects, including the water supply fund, should also cover supply to industry.
In the budget tabled in Parliament today, it was announced that the National Export Promotion Funds would provide RM130 million to local SMES for export promotion programmes via the Malaysian External Development Trade Corp, Malaysian Investment Development Authority and SME Corp Malaysia.
To boost export-oriented SMEs, the government would provide a 2% rebate on interest rates charged to SME borrowers, under the working capital guarantee scheme managed by Finance Ministry’s Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP).
The rebate is limited to a total accumulated funding of RM1 billion, which involves an allocation of RM100 million for a period of five years.
The government is also allocating RM75 million to implement programmes under the SME Master Plan.