Latest news with #Samenta
New Straits Times
7 days ago
- Business
- New Straits Times
'Taxing cloud providers not good idea'
KUALA LUMPUR: Any plan to impose a levy on cloud service providers (CSPs) will be counterproductive, says a top industry executive. Small and Medium Enterprises Association (Samenta) national president Datuk William Ng said SMEs face the brunt of increased costs that slow their cloud adoption, while providers may curb investment - a dynamic that threatens Malaysia's ambition to be a digital investment hub. In most other markets, NG said, universal service levies remain focused on telecom operators rather than application-layer services, as expanding them into cloud services will likely have adverse impact on growth, competition and gross domestic product. "We're already seeing escalating costs from cloud service providers. Some global providers have increased their fees by 15 per cent to as much as 250 per cent over the past three years. "Since migration between platforms is rarely straightforward, SMEs affected by these price hikes often have little choice but to absorb the extra cost," he told Business Times today. Ng was commenting on Khairy Jamaluddin and Shahril Hamdan's statements suggesting that a six per cent levy on CSPs under the universal service provision (USP) fund is in the offing. In the latest episode of the Keluar Sekejap podcast, Khairy and Shahril said the prospect may increase operational costs for SMEs and weaken Malaysia's attractiveness as a key destination for digital investment. Ng said a more balanced approach would be to register and regulate the CSPs and to apply the same anti-profiteering rules that our SMEs are already subject to. "However, that would require a fundamental rethink of the USP framework itself. Penalising providers while also taxing their growth is unrealistic," he added. Meanwhile, Khairy and Shahril raised concerns that the levy, if implemented, would have knock-on effects across the digital economy ecosystem. Khairy warned that the levy could drive up costs for consumers and businesses, potentially hindering digital adoption. "Six per cent of the revenue is not small. It's a substantial amount. So naturally, CSPs will pass on that cost to their customers. "Among them are e-commerce platforms serving SMEs and businesses that rely on the cloud to boost productivity. Those custimers will, in turn, pass the cost down to consumers," he said. Shahril pointed out that over 90 per cent of businesses in Malaysia are SMEs, many of which are still struggling to embrace digital technologies. The additional cost, he added, would further hinder cloud adoption which is a key component in SME digitalisation. "One of the key challenges for SMEs is achieving digitalisation, given the barriers they already face. "Adding further costs due to the USP, which are likely to be passed on, will only deepen resistance to adopting cloud solutions, a critical component of their digital transformation journey. "So this really raises concerns about how such a move negatively impacts one of the very economic development models that have been actively promoting," he added. Khairy noted that no other Southeast Asian country imposes such a levy on CSPs. He warned that global tech giants such as Amazon Web Services (AWS), Microsoft and Google may view Malaysia as less competitive compared to Singapore, which does not impose any CSP-specific taxation. "I'm sure these companies have already raised the matter with US trade representatives," said Khairy, proposing that the government delay the implementation of the levy by a year to allow time for further discussions with foreign investors. Khairy said the USP fund was originally imposed on telecommunications companies (telcos) like Maxis Bhd and Telekom Malaysia Bhd to fund basic infrastructure development, such as communication towers in rural areas. However, he argued that the same logic does not apply to CSPs which operate under a different business model. "I'm just trying to understand this. Telcos are required to provide widespread services to everyone because we aim for universal coverage. But not everyone needs a cloud service provider. So it doesn't quite make sense to equate CSPs with the USP obligation," he said. Khairy expressed concern that the levy may be based on the assumption that CSPs must "give back" due to their high consumption of electricity and water – even if those resources come from renewable sources. But if that's the case, he argued, the mechanism should be a separate environmental or resource levy instead of the USP fund. Khairy and Shahril said the government must clarify the true rationale behind the levy. They suggested postponing its implementation to allow stakeholder engagement and dialogue with industry players and foreign investors. "We're not rejecting it outright. But there should be clear justification, and no rush.
Free Malaysia Today
18-07-2025
- Business
- Free Malaysia Today
Impractical to expect manufacturers to reshore to US, says biz group
Malaysian businesses should focus on building resilience, scalability, and long-term competitiveness, rather than reacting to 'policy short-termism', says Samenta's William Ng. (File pic) PETALING JAYA : Malaysian manufacturers should not be expected to shift their production to the US to avoid newly imposed tariffs, a key business group has said. In a statement to FMT, the Malaysian International Chamber of Commerce and Industry (MICCI) described the proposal, associated with US president Donald Trump, as impractical for most local firms. While large multinationals with deep capital reserves and global footprints may benefit from it, MICCI said such a move would pose a major obstacle for small and medium enterprises (SMEs), the backbone of Malaysia's industrial sector. It said that setting up production in the US would create substantial cost pressures, including through higher labour and raw material expenses, as well as foreign exchange risks, given the strength of the US dollar against the ringgit. 'For many businesses, the compounded effect of these factors could easily outweigh any tariff relief and undermine business sustainability,' the statement said further. 'It is simply not a commercially viable solution for most Malaysian manufacturers.' The group stressed that relocating production is a complex, long-term investment that requires careful evaluation of supply chain readiness, customer proximity, access to skilled labour, and long-term cost stability. Instead, MICCI urged the government to strengthen Malaysia's trade position through diplomatic engagement with the US. It also called for greater support for local manufacturers via incentives for digitalisation, automation and export market diversification. On July 7, the US announced a 25% tariff on Malaysian goods effective Aug 1. In a letter to Prime Minister Anwar Ibrahim, Trump said the tariff was necessary to address the 'unsustainable' US trade deficit with Malaysia, which he described as a threat to the US economy and its national security. Pointing out that no tariffs would be imposed if Malaysian companies chose to manufacture in the US, Trump promised to fast-track approvals to facilitate relocation to US shores. However, the Small and Medium Enterprises Association of Malaysia (Samenta) urged policymakers and businesspeople not to place too much emphasis on Trump's suggestion, adding that national policy should not be dictated by foreign political cycles. Samenta chairman William Ng told FMT that Malaysian businesses should instead focus on building resilience, scalability, and long-term competitiveness, rather than reacting to 'policy short-termism'. He acknowledged that co-investments and strategic partnerships with US entities may make sense for selected large firms and high-margin producers. Such businesses should receive government backing on a case-by-case basis, he said, especially if they result in job creation or technology transfers that benefit Malaysia. 'But I can't think of many Malaysian brands or products that would thrive under such arrangements. This highlights the urgent need for us to innovate and move beyond being mere assemblers,' he said. 'For the vast majority of Malaysian manufacturers, especially SMEs, relocation is not a viable option. Costs for raw materials, labour, compliance and land are far higher in the US. William Ng. 'Even with the 25% tariff, Malaysia still holds a significant cost advantage. At most, we might consider shifting operations to countries with lower tariffs, but only if we believe these reciprocal tariffs will persist beyond the current US administration.' Ng called for Malaysia to speed up trade diversification efforts, especially through under-utilised free trade agreements, like the Regional Comprehensive Economic Partnership and Comprehensive and Progressive Agreement for Trans-Pacific Partnership. He said the current tensions should serve as a wake-up call for Malaysia to reduce reliance on a single export market and to strengthen its domestic manufacturing base. 'The heavy-handed way in which the tariffs are being imposed sends a worrying signal to exporters—especially our SMEs and mid-tier firms that depend heavily on the US market—that it's time to diversify, and quickly,' said Ng.
Free Malaysia Today
16-07-2025
- Business
- Free Malaysia Today
Continue engaging BRICS countries, say business groups
US President Donald Trump had threatened countries cozying up to the BRICS alliance with an extra 10% tariff. (AP pic) PETALING JAYA : Several business groups have backed Putrajaya's decision to strengthen ties with BRICS nations, despite US president Donald Trump's threat to impose an additional 10% tariff on countries aligning with the bloc's policies. The Small and Medium Enterprises Association of Malaysia (Samenta) said trade decisions should not be swayed by external pressure or intimidation. William Ng. 'Malaysia should continue engaging with BRICS, particularly on trade equity, technology transfer, and development financing. This is especially important given the policy volatility of the US,' Samenta president William Ng told FMT. 'Should additional tariffs be imposed, SMEs must pivot to other BRICS economies like China, India and South Africa.' Trump has warned that countries supporting BRICS policies that conflict with American interests will face an additional 10% tariff. He has consistently criticised the bloc—whose members include China, Russia and India—saying it is undermining global stability. In response, investment, trade and industry minister Tengku Zafrul Aziz reaffirmed Malaysia's commitment to deepening cooperation with BRICS nations. He said the country's multilateral engagements are guided by national interest—not ideological allegiance. The Malaysian International Chamber of Commerce and Industry (MICCI) also expressed support for continued engagement with BRICS, but stressed the need to diversify export markets to mitigate risks. 'Industries with significant exposure to the US market, such as electronics, electrical and electronic components, palm oil, medical devices, automotive parts and textiles, could be most affected,' it said. Jayant Menon. Echoing similar views, economist Jayant Menon of ISEAS-Yusof Ishak Institute said Malaysia must start weaning itself off dependence on the US, which is 'increasingly presenting itself as an aggressive, unreliable, and erratic trading partner'. 'Although there will be an adjustment cost in the short run, this will be beneficial in the long run,' he said. In 2024, the US was Malaysia's third-largest trading partner, with total trade reaching RM324.91 billion. Malaysia recorded a trade surplus of about RM72.39 billion with the US that year.
Daily Express
12-07-2025
- Business
- Daily Express
New Sales and Service Tax burdening clinics, pharmacies
Published on: Saturday, July 12, 2025 Published on: Sat, Jul 12, 2025 By: David Thien Text Size: Lim (right) speaking with a panel of other invitees. Kota Kinabalu: Starting July 1, 2025, Malaysia implemented a significantly expanded Sales and Service Tax (SST) regime that also affects doctors operating their clinics, pharmacists and related health industry players. Malaysia's Small and Medium Enterprises Association (Samenta) decided to voice out for these medical practitioners on the SST woes affecting them. According to Samenta's Sabah branch head Dato' George Lim, business costs have risen due to SST compliance. He was addressing the audience at his GA Space premises in a forum on June 12: 'Government and Entrepreneurs should collaborate to reach common goals for environmental protection'. The event was organised by PUMM, a non-governmental organisation. Subscribe or LOG IN to access this article. Support Independant Journalism Subscribe to Daily Express Malaysia Access to DE E-Paper Access to DE E-Paper Exclusive News Exclusive News Invites to special events Invites to special events Giveaways & Rewards 1-Year Most Popular (Income Tax Deductible) Explore Plans Stay up-to-date by following Daily Express's Telegram channel. Daily Express Malaysia
The Sun
09-07-2025
- Business
- The Sun
US tariffs pose ‘economic earthquake' for SMEs
KUALA LUMPUR: The Small and Medium Enterprises Association (Samenta) views the 25% tariff imposed by the US on Malaysian exports as a serious threat to the country's trade competitiveness and industrial base, especially for export-oriented SMEs that form the backbone of the domestic manufacturing ecosystem. Samenta national president Datuk William Ng said the new US tariff is the equivalent of an 'economic earthquake' for domestic SMEs that are significantly exposed to the US market. He said Samenta has consistently pointed out that Malaysia's headline economic growth often masks deeper structural weaknesses within the SME sector. 'The real paradox is our ability to register macro-level gains while most SMEs remain trapped in low-margin, low-scale operations – squeezed by rising costs, regulatory pressures, and now, geopolitical shocks. 'The imposition of US tariffs is a stark reminder of the urgent need to recalibrate our economic model to prioritise the long-term viability and competitiveness of our 1.5 million SMEs, with the creative and service economy at the heart of it,' he said. Ng stated that Samenta is fully committed to collaborating with the government to provide support to all SMEs, whether directly or indirectly impacted by the tariff. 'We acknowledge the government's continued pursuit of a 'balanced and mutually beneficial' trade resolution with Washington, but we need urgent and coordinated action to cushion the impact on impacted SMEs. 'Samenta is hopeful that the government will expedite the roll-out of previously announced targeted support measures, particularly the RM1 billion increase in SJPP guarantees, RM500 million in soft loans via development financial institutions, and the RM50 million boost to Matrade. 'These initiatives must be delivered quickly and with minimal red tape,' he said in a statement. Ng said more importantly, these relief measures must be extended to domestic, non-exporting businesses. The anticipated tailwinds from subdued exports and weaker domestic demand will affect the services sector in equal intensity, he said. 'In particular, we urge the government to pause all new and planned cost increases on SMEs, including the proposed rationalisation of petrol subsidy and incremental fees proposed by various agencies and local councils. 'As labour shortages remain one of the most pressing challenges, particularly in the services sector, we urge the government to urgently review and ease restrictions on the hiring of foreign workers in sectors such as food services, tourism, and logistics. 'With our export momentum set to face headwinds, supporting our service-based SMEs to absorb the slack will be crucial in maintaining our economic resilience,' Ng said.
