Kota Kinabalu: The Small and Medium Enterprises Association (Samenta) is the only NGO that seriously fought to get the RM150,000 business turnover threshold and below exemption from the e-invoicing regime for micro, small and medium enterprises (MSMEs) that the Federal Government has imposed on businesses, when they are just recovering from Covid pandemic effects.
Most SMEs are still experiencing margin compression and are struggling due to a mix of digital disruption, labour shortages, and rising compliance costs.
AdvertisementThe 37-year legacy of Samenta propels it to continue to speak up for the 1.2 million SMEs in Malaysia and help them to grow and succeed by improving the overall business environment for SMEs.
Samenta reiterated its commitment to supporting the Madani Economy, and hopes that the concerns of SMEs will be addressed. Samenta national president Datuk William Ng said it requested for RM500,000 exemption threshold for MSMEs as was with the past 6 per cent GST threshold tax regime when the Ministry concerned was forcing all businesses into the e-invoicing regime even though Malaysia is not yet a developed country.
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“SMEs continue to grapple with rising costs and the pressure to increase selling prices,” Ng said.
Advertisement“With additional compliance requirements such as the e-invoicing mandate and adherence to environmental, social, and governance standards, businesses are under significant strain.
“To ease this burden, we urged policymakers, regulators, and logistics players to focus on delivering solutions that prioritise efficiency, affordability, and innovation to support the resilience and growth of SMEs,” he said.
Advertisement (adsbygoogle = window.adsbygoogle || []).push({});“We are concerned that the government may be lulled into believing that our SMEs are doing well because of the strong economic rebound, moderation of inflation and strengthening of the ringgit.
“Contrary to that belief, many SMEs are badly impacted by the additional cost of doing business and are mulling a steep increase in selling prices,” Ng said.
Samenta Sabah head Dato George Lim told Daily Express at the Sabah branch inauguration recently that once a business has been registered to issue e-invoices, later, even if their business turnover fell below the RM150,000 threshold exemption mark, that enterprise would still have to continue in the e-invoicing regime, without exemption.
He said there are alarming numbers of growing unemployed graduates.
Malaysia’s business ecosystem is highly dependent on its MSMEs for employment opportunities, as these account for nearly 97 per cent of all business establishments in the country. These businesses are facing increasing challenges due to rising costs, George said.
On the shortage of foreign workers in the SME industry, Ng said generally the issue is being resolved, and the proposed multi-tiered levy by the government would further alleviate the problem.
Samenta in principle supported the initiative if some of the additional income that the government would generate from the levy could flow back to SMEs in terms of training and upscaling skills of SME workers.
“At the same time, various government agencies and local authorities are increasing their fees for SMEs by 15-250 per cent. Many SMEs are desperate for help,” he said.
Ng hopes the government is mindful of these issues and will consider refraining from introducing any new or additional taxes that could further impact the competitiveness of SMEs.
“Focus should be on helping our SMEs scale, manage their costs, and tap into the various opportunities presented by the energy transition, climate change, ageing population, artificial intelligence and the shifting global economic order,” he said.
Globally, US President Trump’s growing tariff regime is not beneficial to business growth potential for the next few years.