END-JUNE is when business owners get into a frenzy, rushing to file their tax returns to avoid getting compounded by the Internal Revenue Service for late submission. This has proved to be problematic for business owners who are not technology-savvy as the IRS has discontinued face-to-face customer guidance for e-filing. Many traditional SME business owners still prefer over-the-counter service submission and the assistance of IRS officers is not something that can be done away with at this point in time.

A survey carried out by pollster Merdeka Center in 2020 among 600 micro and small enterprises owners throughout the country revealed the unreadiness of almost one-fifth of SMEs in utilising technology in business operation. Breaking down into detail, 79% from the same group of business owners said that they did not utilise any software in all business operations. Similar findings were found in a report by the World Bank Group in 2015 that only 29% of local businesses had an online presence while 5.2% engaged in e-commence. This result is relatively low albeit Malaysian consumers are quick to adopt new technologies. Moreover, local businesses were also lagging behind the global average in adopting the use of technology in their operations.

With such revelations, are business owners ready for full digitalisation in public service, such as e-filing?

No doubt, the use of digital tools plays a vital role in helping SMEs lower costs, standardise and automate business processes, as well reduce reliance on human labour. However, it needs to be on par with the reality on the ground and the needs of tax payers ought to be studied in order to ensure equal distribution of resources. In view of this, policy-makers need to be aware of two points in formulating policies that are empathetic towards Malaysian SMEs.

First, demystify the OEDC Digital for SMEs Global Initiative (D4SME) by exploring trends and patterns in SME digital uptake. It is extremely important to have a better understanding of business owners’ motivations and capabilities, so that policies can be tailored to meet their needs. SMEs should be inclusive in this initiative, especially micro-enterprises and small businesses on the ground. In New Zealand, a Small Business Strategy was created by SMEs and is currently in effect. Through e-Invoicing, Business Connect and Better for Business, which improves business connection with government through digital methods, the government is also driving increased digital functionality. Guided by D4SME, most of the digital shift should be made to all SMEs by promoting knowledge sharing and gradual learning that include multilateral stakeholders, including governments, regulators, business sectors and other institutions to assist in accelerating digitalisation and technology adoption by SMEs.

Secondly, provide regulatory environments with a digital infrastructure and market conditions that increase SMEs’ access to global digital commerce is also equally important. Public servants, being the brand ambassadors of the government, should play paramount roles in helping SMEs in managing innovation assets, improving the availability of financing, as well as increasing digital and skills awareness. An SME-friendly environment could made to understand how SMEs are using new technology. While cell phones, laptops, computers, apps, websites and cloud services are nothing new to most of us today, it is crucial to understand why many SMEs are slow to integrate technology into their business operations, let alone the elderly business owners.  Customer service should not be discontinued immediately in post-COVID-19 recovery as this could severely impact many business owners who are used to counter service or manual submission, such as income tax.

Moving towards digitalisation and going paperless for the preservation of the environment are good inspirations but still, providing in-person public service and guidance is a pragmatic practice that does not cost much financially. SMEs contributed 38.9% to Malaysia’s overall GDP, so more study should be done to help this segment meet their needs and to ensure that the number of SMEs in the country keeps growing in the future. Substantial leadership from within government and the private sector is needed, in tandem with a comprehensive strategy, in assisting SMEs transition more smoothly to the digital environment. – July 9, 2022.

* Iris Ng Pei Yi reads The Malaysian Insight.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.