BUDGET 2023 had addressed our request for an increase in the threshold for the proposed tax reduction for businesses, the Small and Medium Enterprises Association of Malaysia (Samenta) said in its reactions to the budget that was tabled today.

“Malaysia’s oldest and largest association of SMEs, thanked Prime Minister Anwar Ibrahim for taking note of the plight and aspirations of the 1 million SMEs in the country,” its chairman William Ng said.

The prime minister, in his budget proposal, said the first RM150,000 of taxable income will now attract a lower tax rate of 15% instead of 17%.

That, Ng said, is a 50% increase in threshold from that proposed in November.

“This effectively reduces the tax contribution per SME by an additional RM1,000 or a total of RM3,000,” he said.

He added the savings could be used to finance much-needed investments in digitalisation and automation.

“The bottleneck for most SMEs is our ageing equipment and machineries, and the lack of digitalisation and automation.

“We are therefore grateful that the prime minister has taken note of these challenges, and allocated RM40 billion in various financing facilities and guarantee schemes for SMEs.”

Describing the budget as “well-balanced, while addressing the various pressing issues affecting businesses, our institutions and the rakyat”, Ng said in the immediate term, the SMEs needed to be helped navigate the difficult transition to a low carbon economy.

They are therefore happy with the RM2 billion fund allocated to support sustainable start-ups and to help SMEs adopt low carbon practice.

“This is ground-breaking and is sending a strong signal, that not only is the government committed to helping SMEs face what we must, but is assigning money for that purpose.”

Ng said another key request that was heeded by the budget was a freeze on power hike.

“We have also asked that the government re-iterate that there will be no further hike of electricity tariff for SMEs this year, to help us better plan our costs and whether the current inflationary pattern.

“We are grateful that the prime minister has once again pledged the same in the just re-tabled Budget 2023.”

To reciprocate those gestures, Ng said Samenta now is giving its commitment “to play our part” on the prime minister’s call for all Malaysians, including businesses, politicians and the civil service to have faith and overcome our economic challenges.

“As the largest association for SMEs, Samenta will support the efforts to rebuild our economy.” –  February 24, 2023.

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