Latest news with #SMEAssociationofMalaysia
New Straits Times
7 hours ago
- Business
- New Straits Times
Business awards' roadshow in Klang draws over 100 participants
KUALA LUMPUR: The 2025 Platinum Business Awards (PBA) National Roadshow has drawn more than 100 participants in Klang, representing the local manufacturing, services and retail industries. The roadshow seeks to motivate businesses to take part in the esteemed awards programme, encouraging them to overcome self-imposed boundaries and strive for national-level recognition. SME Association of Malaysia national president Dr Chin Chee Seong said it remains dedicated to supporting the long-term growth of small and medium enterprises (SMEs). This is by enhancing their competitiveness in an ever-evolving market landscape and steering them towards more structured, forward-looking business models. "We have established a strong presence across the country through our branch and member networks, which extend beyond state lines to regional levels. "This allows us to connect deeply with local businesses and truly understand their real needs," he said in his speech. SME Association of Klang president Alan Tan Fuu Soon said the city has a deep historical heritage and has been home to many capable and forward-thinking entrepreneurs. "True business strength doesn't lie in size, but in remaining steadfast during challenges and staying true to one's values. Klang entrepreneurs are shining examples of steady progress and continual breakthroughs," he said. Alan added that PBA seeks to recognise businesses that are steadfast, adaptable and dedicated to contributing to society.
The Star
02-07-2025
- Business
- The Star
Brace for price hikes across the board, consumers told
PETALING JAYA: Consumers should brace themselves for a gradual increase in prices of goods following the implementation of the new electricity tariffs effective July 1, say business groups. This is because manufacturers and those in the affected sectors may not be able to absorb higher costs and would likely pass on to consumers. SME Association of Malaysia president Chin Chee Seong said it is too early to gauge the overall increase in electricity bills for businesses. 'It is difficult to say how much their electricity bills will increase at the moment. 'This is because the new tariffs are based on the amount of electricity used and on different rates of consumption. 'Talk among some SMEs is that there is likely to be at least a 20% increase in electricity bills,' he said when contacted yesterday. Chin said the association will gather feedback from its members to determine how much more they have to pay for their electricity. Asked whether the SMEs will absorb the higher electricity costs, Chin said it is unlikely. 'Most of them would not absorb the cost and pass it down to either their supply chain or consumers. 'We should expect to see an increase in prices, especially among the SMEs, food and beverage, and the retail sectors,' he said. Federation of Malaysian Business Association vice-chairman Nivas Ragavan said some businesses may try to absorb the electricity cost increase, but not entirely. 'Manufacturers have always tried to absorb cost increases where possible through efficiency measures and cost optimisation. 'However, with rising cumulative costs such as raw materials, logistics, labour and now energy, many, particularly the SMEs and export-driven businesses with thin margins, will not be able to absorb the full cost,' he said when contacted yesterday. He said the manufacturing sector is expected to see its electricity bills increase between 5% and 7%. 'For energy-intensive industries, the impact could be more significant, especially if they are not eligible for the Imbalance Cost Pass-Through rebate,' he added. As a result of this, Nivas said that it is likely that some portion of the increased energy cost will be passed down the supply chain. 'This could take the form of adjusted pricing to downstream partners and eventually may have an impact on consumer prices, depending on the sector and product,' he said. He noted that some manufacturers will try to minimise the increase in cost where possible to remain competitive, especially in global markets. Federation of Malaysian Manufacturing (FMM) president Tan Sri Soh Thian Lai said the new electricity tariffs will not have a uniform impact on the manufacturing sector and will vary according to electricity usage. 'FMM understands that 70% of medium voltage customers, many of whom are industrial users, will have a reduction in electricity bill ranging from 4% up to 18% depending on the load factor. 'The higher their load factor, the higher the reduction in their bills,' he said when contacted yesterday. However, Soh said the remaining 30% with a low load factor may see an increase of between 3% and 10% in the electricity bills. 'Some customers in this category have installed solar PV systems, allowing them to offset the increase in bill through the revised mechanism under the renewable energy schemes,' he added. Asked whether the increase in cost will be passed down through the supply chain, Soh said it is unlikely due to stiff market competition.
The Star
29-06-2025
- Business
- The Star
Call to review SST for SMEs
PETALING JAYA: The revision of the Sales and Services Tax (SST) thresholds for rental and leasing services represents a step forward, but industry experts argue that without accompanying structural reforms, Malaysian small businesses will continue to struggle in the challenging economic climate. SME Association of Malaysia president Dr Chin Chee Seong said that more should be done to address challenges faced by small businesses. ALSO READ: Traders brace for cost hikes, weaker spending 'The current revision to the SST threshold, while helpful to a small segment, does not fully address the systemic pressures MSMEs face,' he said. Chin pointed out that among the additional support to small businesses are tax policy recalibration, reintroduction of input tax credit or tax offset mechanism and stronger digitalisation and compliance support. He explained that recalibrating tax policy based on tenant size would shield MSMEs from burdensome tax costs, particularly in high-rent urban areas. 'The vast majority of landlords in urban centres including commercial building owners, mall operators and property investment companies easily exceed the RM1mil threshold. 'As such, most MSMEs renting from these landlords will still be charged the 8% service tax, resulting in an unavoidable increase in their operational costs,' he said, suggesting the threshold should be set at RM2mil or higher. On Friday, the Finance Ministry announced revisions on the expanded SST which is due to begin on July 1. Among others, the annual sales threshold for mandatory Service Tax registration has been raised from RM500,000 to RM1mil for leasing, rental, and financial services. Chin also urged the government to consider the reinstatement of a more structured tax framework, citing Goods and Services Tax (GST), or a hybrid model that could reduce double taxation. 'Many MSMEs lack digital tools or accounting systems to manage SST compliance and the incoming e-invoicing mandate. 'Expand access to subsidised point-of-sales systems, accounting software, and e-invoicing tools under programmes like MSME Digital Grant or Penjana,' he said when explaining about the need for digital transformation for MSMEs. 'If the government is serious about enabling MSMEs, the backbone of Malaysia's economy, to remain competitive and resilient, it must go beyond symbolic tax threshold adjustments. 'What is required is structural reform, practical support, and policy empathy that takes into account the fragile business environment, rising operating costs, and the need for long-term sustainability,' added Chin. Federation of Malaysian Business Associations vice-chairman Nivas Ragavan agreed with the need for a higher threshold. While the RM1mil threshold was positive and meaningful for MSMEs, he cited factors such as high operational costs in the urban areas. As such, he said there should be a further increase to RM1.5mil or introduce a tiered threshold according to sectors. This was to provide more room for MSMEs to scale before being burdened with tax obligations, he said. Nevertheless, Nivas agreed that the revision would allow the sector to keep prices more affordable for consumers. 'It would also allow MSMEs to retain margins or reinvest in business development and reduce administrative distractions so they can focus on their core business,' he said. As part of further support to small businesses, Nivas suggested that there should be a simplified taxation system for MSMEs, like introducing presumptive tax systems.
Borneo Post
28-06-2025
- Business
- Borneo Post
Wrong timing, weak planning: Why businesses are bracing for impact as SST expansion approaches
While aimed at strengthening fiscal resilience, many business associations and industry commentators argue that the move has come at the worst possible time – amid a fragile economic recovery and rising global uncertainties. – Stock photo from Pixabay THE Malaysian government's decision to expand the Sales and Services Tax (SST), set to take effect this July 1, is stirring significant concern across industries as businesses groups sound the alarm on potential impacts on our domestic economy. A tax in troubled times While aimed at strengthening fiscal resilience, many business associations and industry commentators argue that the move has come at the worst possible time – amid a fragile economic recovery and rising global uncertainties. Recent GDP figures reflected this vulnerability as Malaysia's economy grew by 4.4 per cent in the first quarter of 2025, a notable dip from the 4.9 per cent recorded in the final quarter of 2024. The World Bank has also recently revised its 2025 GDP growth forecast for Malaysia downwards from 4.5 per cent to 3.9 per cent, further reinforcing expectations of a slowing domestic economy. Key domestic sectors, including construction and manufacturing, have also begun to slow, while external pressures such as the escalating US-China trade war, US tariffs and escalating geopolitical tensions threaten to further dampen export performance. Amid these headwinds, industry pundits pointed out that the SST expansion risks compounding domestic challenges rather than alleviating them. What's different under 2025 SST expansion? Announced under Budget 2025, the upcoming SST expansion represents a significant widening of the tax base. This includes the expansion of the sales tax to non-essential items such as king crab, salmon, imported fruits, racing bicycles, and antique artworks, while the service tax will now cover a wider spectrum of services such as renting and leasing, construction, financial services, private healthcare, education, and beauty treatments. Finance Minister II Datuk Seri Amir Hamzah Azizan has estimated that the expanded SST will generate RM5 billion in additional revenue in 2025, bringing total SST collection to RM51.7 billion. Of this, RM2.2 billion is expected to come from the sales tax component, while RM2.8 billion from services. Amir Hamzah has emphasized that these changes aim to support government expenditure and social programs without overburdening the lower-income group. Yet, business sentiment seems to paint a different picture. Businesses sound off In a joint statement issued on June 15 by six business associations – the SME Association of Malaysia, Malaysia Retail Chain Association (MRCA), Malaysia Retailers Association (MRA), Bumiputera Retailers Organisation (BRO), Malaysia Shopping Malls Association (PPKM), and the Federation of Malaysian Business Associations (FMBA) have expressed firm opposition to the SST rollout. In particular, the statement criticized the eight per cent service tax on commercial property rentals and leasing services, calling its timing 'gravely misguided'. 'Implementing such a broad-based tax hike amid a fragile recovery will exacerbate inflation, cripple SMEs (small and medium enterprises), discourage investment, and erode consumer confidence,' the consortium said. Already under pressure from cost inflation and sluggish demand, SMEs and retailers who find themselves having to grapple with tighter margins and elevating operating costs may inevitably find themselves having to pass these costs onto consumers which would further reduce household purchasing power and threaten the viability of retail operations. The result, they say, could be widespread downsizing, closures, and job losses – all of which would further weaken the domestic economy. That said, the associations stressed that their opposition is not to the principle of taxation, but rather to the current approach, which they describe as lacking consultation and sensitivity to the current economic realities. Lack of engagement with industries, consumers While the Ministry of Finance had earlier stated that the Royal Malaysian Customs Department was engaging with industry stakeholders to finalise the scope and rate of the tax back in February, the response from many associations suggests otherwise. The Malaysian Iron and Steel Industry Federation (MISIF), for instance, issued a statement on June 20 warning that the SST and the proposed carbon tax would severely undermine the competitiveness of the steel sector especially in the current macroenvironment. MISIF pointed out that over 240 steel-related products – including coking coal, coke, and steel scrap – would be affected. 'These are critical raw materials, and the added cost burden could encourage cheaper imports, discourage local production, and erode Malaysia's manufacturing base.' The association also argued that taxing machinery and equipment contradicts the goals of the New Industrial Master Plan 2030, which emphasizes automation, green steel, and advanced technologies. Moreover, a 10 per cent tax on steel mesh which is widely used in Industrialised Building System (IBS) projects could also slow construction progress, as it shifts contractors away from automation, and increase their reliance on manual labour and foreign workers. Further discord emerged when the Minister of Plantation and Commodities, Datuk Seri Johari Abdul Ghani, announced that his ministry had called for an urgent consultation with stakeholders in the palm oil and oleochemical industries following negative feedback over the imposition of a five per cent SST on oleochemical products. 'I have instructed the ministry to engage with industry players. We want to know specifically which parts are affected. The SST is a taxation system that has already been implemented in our country. 'When receiving significant negative feedback, I said we should not just react; instead, we need to engage with the industry to understand the impact. If it affects competitiveness, only then will we review it,' he told the media after officiating at the Malaysian Palm Oil Board's Technology Transfer Programme 2025 on June 19. While the move indicates a willingness to engage, it also raises questions about the quality and depth of earlier consultations with stakeholders if such an urgent response had to occur. And the chorus of discontent seems to have continued to grow steadily over the last few weeks with associations like the Federation of Malaysian Manufacturers (FMM), the Malaysian Rubber Glove Manufacturers Association (Margma), the Real Estate and Housing Developers' Association (Rehda), the Association of Private Hospitals of Malaysia, and the Master Builders Association Malaysia (MBAM) all calling for the SST changes to be delayed, revised, or restructured. Even consumers have pushed back with many questioning certain aspects of the SST expansions like the broad inclusion of imported fruits as they argue that many daily staples are imported. To this end, Prime Minister Datuk Seri Anwar Ibrahim announced on June 26 that the government had decided to 'compromise' and exempt apples and oranges, which are consumed by the masses from the SST expansion. 'Tax reform is not the issue, a lack of strategy is' Commenting on the issue, Hedki Heng, a corporate culture researcher and serial entrepreneur, regarded the reform of the SST as 'not an inherently wrong move, but doing so without a well-communicated strategy is just lazy policy, which may erode the people's trust'. 'We're not unwilling to contribute. We just want to know what we're contributing toward. How long must we bear it? Is it worth it? In an age of uncertainty, every government decision builds or breaks public trust,' he said. 'When we voted for a government promising reform, transparency, and hope, we weren't just asking for salary reviews or tax tweaks. We wanted long-term structural change. 'But instead we what we got was policies that change so frequently both businesses and the rakyat can't plan ahead, rising taxes and falling subsidies with no real measures to boost incomes, vulnerable communities being pushed to breaking point, and a 'tax first, aid later' model that contradicts with the intent to help and disconnects people from policy,' he lamented. He argued that his current 'change first, explain later' attitude towards new policies gambled with the trust of citizens, and 'is the true crisis at hand'. 'There is a collapse in public trust. The more policies we have, the less trust we seem to gain. And when hope is betrayed, disappointment becomes even heavier. 'Please don't let this opportunity for reform become another chapter of national disappointment,' he warned. 'So, what can we do to fix this?' Well, for Heng, the answer seems obvious. 'What we desperately need now is a clear medium-to-long-term fiscal roadmap that will tell us exactly how Malaysia's revenue will be sustained, how our economy will be restructured and what our tangible fiscal goals are. 'Once that's done then, and only then, can we move towards introducing new policies that have been thoroughly studied and discussed with industry stakeholders. 'Every major policy must include clear explanations of who will be affected, how the pain will be cushioned, and what support systems are in place. No more trial-and-error policies with no accountability,' he stressed. And finally, Heng also emphasised that for the people to tighten their belts for fiscal reforms, the government must also lead by example by reforming government linked corporations (GLCs) and trim inefficiency. 'A bloated public sector and excessive spending cannot be the rakyat's burden anymore.' businesses focus lead SST tax
New Straits Times
26-06-2025
- Business
- New Straits Times
SME awards roadshow in Sarawak drawn over 150 key figures
KUALA LUMPUR: The recent 2025 Platinum Business Awards (PBA) National Roadshow in Kuching attracted more than 150 key figures. This included local business leaders, government representatives and financial institutions. The roadshow highlighted the progress and opportunities within Sarawak's small and medium enterprises, said the SME Association of Malaysia. The roadshow was not just about promoting the awards, but also functioned as a valuable platform for strategic discussions and the exchange of insights and experiences, it added. National president Dr Chin Chee Seong said the Sarawak state government had demonstrated a firm commitment to advancing SME development, with efforts extending beyond urban centres into rural areas. He added that the approach underscores the state's solid infrastructure and supportive policies, which are creating exceptional growth prospects for SMEs, especially in sectors such as agriculture, food security, and their associated value chains. "SMEs need more than just financial support, they require technological transformation and market integration. "We aim to leverage resources from our nationwide branches to foster cross-sector collaboration among members, shifting from traditional businesses to new areas such as digitalisation, agri-tech and renewable energy," Chin added. Advisor to the Sarawak Ministry of International Trade, Industry and Investment, Datuk Seri Mohd Naroden Majais said the Platinum Business Awards remain a key platform for acknowledging the exceptional accomplishments of small and medium-sized enterprises. "This year's evaluation criteria place greater emphasis on corporate culture and sustainability, underscoring that true success goes beyond profit. "It comes from how a business treats its people, gives back to society, and protects the environment. Despite challenges, many SMEs have demonstrated remarkable resilience and adaptability," he added.
