MICRO-, small- and medium-sized enterprises (MSMEs) urged Putrajaya to do away with bureaucracy when dishing out aid promised in the Budget 2023 speech so that everyone benefits.

They said Budget 2023 is well-balanced and addresses various pressing issues affecting businesses especially after the Covid-19 pandemic.

Ayob Majid of the Ampang Small Traders and Hawkers Association praised Prime Minister Anwar Ibrahim for providing billions for SMEs but hoped the current administration would stop the use of “middlemen” when getting new entrepreneurs financial aid.

Recalling his own experience, Ayob said it was difficult for certain entrepreneurs to get government assistance without knowing “insiders”.

“Budget 2023 is good, the aid given to SMEs is huge and the other incentives such as lower tax rates surely lifts a huge burden off our shoulders.

“However, one thing the government needs to get rid of is the unnecessary bureaucracy. Even when you have complete documentation to apply for a SME loan, you get rejected and in the end, you need insiders to help you get the loan.

“This is my own experience. Either you have a friend or friend of a friend. If not it will be tough. I hope we can eliminate this sort of corruption and abuse of power. Allow everyone to get assistance,” said Ayob.

Anwar’s unity government proposed to reduce taxation on MSMEs with RM150,000 income to 15% from 17% previously, which he added will enable 150,000 MSME taxpayers to each save up to RM3,000.

He said government agencies are set to continue the provision of RM40 billion in financing facilities to MSMEs and the government has allocated RM100 million under the SME Grant Scheme.

Bank Simpanan Nasional (BSN), BNM and the National Entrepreneurial Group Economic Fund will provide another RM1.7 billion in loan facilities to help micro-entrepreneurs, women and youths.

Meanwhile in a statement, the Small and Medium Enterprises Association of Malaysia (Samenta) said the government has addressed its request for an increase in the threshold for the proposed tax reduction for businesses.

“Malaysia’s oldest and largest association of SMEs, thanked the government for taking note of the plight and aspirations of the one 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 what was proposed previously in November.

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

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

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

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

More funds for green technology

Teh Kee Sin, who once headed the small and medium enterprises (SMEs) association lauded the provision of RM1.7 billion for youth, women and micro entrepreneurs.

He, however, urged the government to provide more funds to green technology start-ups saying that in previous cases, many were unable to secure the funds as it ran out fast.

“Getting the youth and women into business is good. Furthermore there is assistance from BSN, Tekun and Bank Negara. It is not easy for a new business to get a loan from banks because they do not have a track record.”

“The government has taken the first initiative to encourage women and youth to venture into business. Women’s participation in business is low but with this RM1.7 billion allocation I hope to see more youth and women involvement.

“On green technology, I think there should be more funds in it because in previous cases, I was told that the funds ran out fast. In other words, it is not enough in the era of digitalisation.

“The government has to look at the needs of SMEs under this segment. Many who have tried to apply for this scheme failed because the funds were insufficient,” he added. –  February 26, 2023.