KUALA LUMPUR (Aug 28): Small and Medium Enterprises Association of Malaysia (Samenta) hopes the new Cabinet lineup announced earlier yesterday will take immediate steps to assist small and medium enterprises (SMEs), many of which are in critical condition financially.
In a statement, central and policy and government relations chairman Datuk William Ng said the pandemic has created a severe liquidity crunch for SMEs and most suppliers have tightened trading terms for fear of default.
“Even if the numbers from the banks may not reflect this, this is felt acutely on the ground and will be debilitating in the recovery phase.
“If SMEs on the rebound can’t get supplies and raw materials, there is little hope of an SME-driven or SME-supported recovery,” he said.
He said the association, while welcoming the new Cabinet unveiled by Prime Minister Datuk Seri Ismail Sabri Yaakob earlier, suggested a few proposals to instil consumer and investor confidence.
“As such, we propose to reintroduce the Goods and Services Tax (GST) in 2022, at four per cent. This will be lower than the current Sales and Services Tax (SST) and will not only reduce tax leakages but also allow input tax to be set-off against the GST to be remitted by businesses,” he said.
He said Samenta also called for the international border to re-open as soon as possible for business travel and exempt the requirement for hotel quarantine for business travellers who are fully vaccinated and tested negative for Covid-19 at the port of entry.
“This will help position us favourably vis-a-vis regional competitors in attracting foreign investors,” he said.
He said Samenta also proposed the corporate tax rate for SMEs for the first RM500,000 taxable income for the assessment year 2021 and assessment year 2022 to be reduced to 15% as this would encourage re-investments and promote entrepreneurship to quickly fill the void left by collapsed SMEs.
“To further help SMEs with cash flow, we should waive Human Resources Development Fund (HRDF) levy until the end of 2021 and reduce the levy to 0.5% for 2022. As at the end of 2019, HRDF has RM1.35 billion in retained levy.
“We certainly can afford to exempt SMEs from levy payment in 2021 and a part-waiver in 2022, without jeopardizing our mandate to upskill our workers. Naturally, as businesses recover, training and upskilling will happen organically,” he said.
He added that Samenta is committed to support the new Government in implementing any plan that could save the country’s SMEs and lead to recovery and growth of the economy.
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