Malaysia’s small- and medium-sized enterprises (SMEs) are asking the government to expand relief measures announced on Monday to also cover non-exporters and non-manufacturers under pressure from US tariffs.
In particular, the government should pause the upcoming expansion of the sales and services tax as well as incremental fees proposed by various agencies and local councils, which would raise the cost of doing business for SMEs, Small and Medium Enterprises Association Malaysia said in a statement.
“In the current environment, even marginal cost escalations could tip many SMEs into insolvency,” said the trade group also known as Samenta. “We [also] call for a temporary freeze on new licensing and compliance requirements that impose additional burdens on SMEs already under strain.”
Samenta represents over 5,500 members nationwide across economic sectors. The statement follows an earlier announcement by the government of financial support totalling RM1.5 billion in guarantees and financing to counter the potential fallout from the US tariff hikes on April 2.
The US has since paused the sweeping reciprocal tariffs for 90 days while imposing an interim 10% tariff on all trading partners. In the meantime, Malaysia is trying to get the US to drop the tariffs.
Domestic services, retail, logistics, construction, trading and food-and-beverage sectors will be equally affected by the tariffs as input costs rise, supply chains tighten and consumer spending begins to contract, said Samenta.
The association also hopes that the government will consider easing current restrictions on the hiring of foreign workers, particularly in the food services, tourism and logistics sectors still grappling with labour shortages.
Increased competition from foreign firms entering the domestic market are also a concern and Samenta called for stronger enforcement of competition laws, local equity requirements for foreign entrants in strategic service sectors, and safeguards against predatory pricing.
To stimulate domestic demand, Samenta is proposing that the government offer incentives to encourage consumers to support local businesses while urging government-linked companies and large corporations to procure more from domestic suppliers.
Samenta is also asking for grants and tax support for “digitalisation, automation and operational efficiency”, as well as zero-interest or deferred-payment working capital loans to keep small businesses in urban centres afloat in the coming months.
“This latest tariff shock is yet another reminder that Malaysia’s economic model must be recalibrated, not around the needs of a few large corporations, but around the 1.5 million SMEs that drive employment and domestic economic activity,” Samenta stressed.
Source: The Edge Malaysia
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<p>Time: 2024 By: Ministry of Industry and Trade</p>
