KUALA LUMPUR (Feb 24): Cognisant of the continued difficulties micro, small and medium enterprises (MSMEs) face in the Covid-19 endemic era, Putrajaya has planned various financing facilities as well as a tax deduction for the segment.
“This administration understands that there are still many businesses that are affected by the pandemic, especially MSMEs,” Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim said in tabling the revised Budget 2023 on Friday (Feb 24).
“The Madani Budget (revised Budget 2023) will ensure that local MSMEs return to competitiveness and improve their business capabilities. Various measures including tax deductions and financing have been prepared to aid their businesses,” he added.
Anwar’s unity government proposed to reduce taxation on MSMEs’ first RM150,000 income to 15% from 17% previously, which he added will enable 150,000 MSME taxpayers to each save up to RM3,000.
It is worth noting that a similar tax deduction was tabled by then finance minister Tengku Datuk Seri Zafrul Abdul Aziz under the previous administration’s Budget 2023. However, the 2% tax reduction was only applicable to MSMEs' first RM100,000 in income.
Anwar said government agencies are also set to continue the provision of RM40 billion in financing facilities to MSMEs. The measure was introduced under Budget 2022 under the name Program Semarak Niaga Keluarga Malaysia.
Towards supporting the adoption of business automation and digitalisation activities, Anwar said the government has allocated RM100 million under the SME Grant Scheme.
“Matching grants of up to RM5,000 will be given to SMEs and small businesses that subscribe to business digitalisation applications such as POS (point-of-sale), accounting and inventory management systems,” Anwar said.
“Separately, there is a RM1 billion facility under Bank Negara Malaysia (BNM) aimed at incentivising SMEs to automate processes and digitalise operations,” he added.
According to Anwar, the central bank will also be providing financing of RM2 billion to support green technology start-ups and aid SMEs implementing low-carbon practices.
Under the previously proposed Budget 2023, Tengku Zafrul had said that BNM would provide RM10 billion in funding for SME automation, digitalisation, tourism and agricultural measures.
Anwar continued that Bank Simpanan Nasional (BSN), BNM and National Entrepreneurial Group Economic Fund (TEKUN) will also provide another RM1.7 billion in loan facilities to help micro-entrepreneurs, women and youths.