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The Star
31-07-2025
- Business
- The Star
SMEs need more than broad promises in 13MP, say business groups
PETALING JAYA: The 13th Malaysia Plan (13MP) outlines broad ambitions for small and medium enterprises (SMEs) but lacks the clarity and targeted reforms needed to support their growth, say business groups. SME Association of Malaysia national president Chin Chee Seong said the plan offers little in terms of fresh strategies to help SMEs scale up meaningfully. 'SMEs need clear pathways to reduce the cost of ESG adoption and obtain relevant certifications,' he said. Chin also questioned the feasibility of halving the country's reliance on foreign workers – from 50% to 10% by 2030 – without addressing current labour shortages. 'Even with digitalisation, many SMEs remain unsure how government support will help them automate or transform,' he said. He proposed targeted grants or deferred payment schemes to support automation, especially in agriculture, where costs remain high. 'Plantations remain predominantly manual in operation. The ministry could designate land for SMEs to test new technologies prior to a wider implementation,' he suggested. Prime Minister Datuk Seri Anwar Ibrahim tabled the 13MP with a pledge to boost SME contributions to GDP to 50% by 2030, alongside efforts to build a more progressive SME ecosystem. Small and Medium Enterprises Association president Datuk William Ng said that while the plan's focus on AI, semiconductors, renewable energy and the creative economy is commendable, several gaps remain. He said the High Growth, High Value strategy and expanded access to digital infrastructure and capital via government-linked companies (GLCs) and public-private partnerships are encouraging, but more must be done. 'Critical areas such as regulatory simplification and easier financing for micro-enterprises and startups are still underdeveloped,' he said. Ng also called for clearer timelines for subsidy rationalisation and labour reforms to help SMEs plan ahead. 'To benefit from the 13MP, SMEs must shift from cost-based models to value-added operations, join strategic industry clusters such as halal and agrifood, and engage in R&D with academia and government,' he said. Ng welcomed labour reforms but warned that many SMEs may struggle during the transition due to tight margins. 'Large firms can absorb higher wages or invest in automation more easily, but SMEs need tangible support to manage the shift,' he said. MCA Economic and SME Affairs Committee chairman Datuk Lawrence Low said the Multi-Tier Levy Mechanism (MTLM) must be accompanied by targeted support to upskill the local workforce. 'A key part of this transition is equipping Malaysians with the right skills to fill roles currently dominated by foreign workers, particularly in the dirty, dangerous and difficult jobs,' he said. He proposed a Local Workforce Transition Fund, financed through part of the levy collected under the MTLM, to subsidise training, job placement and wage top-ups. Low also recommended lower corporate tax rates for firms investing in automation and productivity to ease the financial burden and accelerate transformation.
New Straits Times
26-07-2025
- 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.
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.
Focus Malaysia
09-07-2025
- Business
- Focus Malaysia
SMEs need urgent support for following US tariff announcement, says SAMENTA
THE Small and Medium Enterprises Association (SAMENTA) has expressed deep concern over the decision by the United States (US) government to impose a 25% tariff on Malaysian exports. Its national president Datuk William Ng said this tariff action, effective Aug 1, is a serious threat to Malaysia's trade competitiveness and industrial base, especially for export-oriented small and medium enterprises (SMEs) that form the backbone of the nation's manufacturing ecosystem. 'For SMEs that are significantly exposed to the US market, this is the equivalent of an economic earthquake,' he said in a statement on Wednesday (July 9). '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.' Ng further expressed hope that Putrajaya will expedite the roll-out of previously announced targeted support measures, particularly the government guarantee allocation under the Business Financing Guarantee Scheme (SJPP) by RM1 bil, the RM500 mil in soft loans via development financial institutions, and the RM50 mil boost to MATRADE, saying these initiatives must be delivered quickly and with minimal red-tape. '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 stressed. '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, SAMENTA also urged 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,' he added. Ng went on to note that Malaysia's headline economic growth often masks deeper structural weaknesses within the SME sector, and the real paradox is the country's 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 remarked. 'SAMENTA remains fully committed to working hand-in-hand with the government to support all SMEs directly or indirectly affected by the tariff.' In a letter addressed to His Majesty Sultan Ibrahim, King of Malaysia and posted on US president Donald Trump's Truth Social platform, Trump said Malaysia's current trade policies had made its trading relationship with the US largely one-sided and non-reciprocal. Trump also described the rate as 'far less' than what is needed to eliminate the country's trade deficit with Malaysia. The rate is also higher than the 24% initially imposed on certain Malaysian exports to the US, later placed on a 90-day pause that ended yesterday. ‒ July 9, 2025 Main image: AFP/Andrew Hanik
