SMEs should utilize Government Incentives as business advantage

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The National Chamber of Commerce and Industry Malaysia (NCCIM) has urged Small and Medium Enterprises (SMEs) to take advantage of the various incentives offered in the 2015 Budget.

"Its a pro-business budget when one talks about how the budget helps the sector to grow, and I urge the SMEs, which contribute about 33 per cent to our Gross Domestic Product, to grab the various incentives offered," said NCCIM Secretary-General Datuk Seri Syed Hussien Al-Habshee.

Various schemes and incentives allocated for SMEs testify to the government's concern to empower SMEs, adding the government should set up a system to monitor the SMEs that have been awarded such grants and financial assistance. A monitoring system similar to the Inspectorate Division in SME Corp is needed. Inspectors will visit and audit the SMEs and offer assistance and guide them in soft skills like accounting, book-keeping and cash flow," he said. Meanwhile, e-commerce giant Rakuten Online Shopping also welcomed the RM375 million allocation for the SME Investment Partner programme as well as the RM2.7 billion to build 1,000 new telecommunication towers and lay undersea cables. 

The Government has proposed to further enhance one of the tax incentives for SMEs under the funding model of Investment Account Platform (IAP). The IAP model was introduced to attract participation from both individual and corporate investors to boost development of SMEs as well as entrepreneurs via a funding system which is efficient, simple and transparent. However, this has not taken off as the Government had envisaged.

To further enhance the IAP, the Government has proposed in Budget 2015 that profits earned by individual investors from investments made through IAP be given income tax exemption for three consecutive years commencing from the first year profit is earned, subject to conditions. The proposed operational date of IAP is from Sept 1, 2015 to Aug 31, 2018.

With this, the Government hopes to attract cash-rich individuals to invest funds into SMEs for project financing to help propel SMEs to the next phase of growth and development.

All small and medium enterprises (SMEs) should take advantage of the RM11.4 billion in government incentives earmarked for their development in 2015, says Minister of International Trade and Industry (MITI), Datuk Seri Mustapa Mohamed. The recent Budget 2015 also outlined several measures to further facilitate the SME development and strengthen their long term competitiveness, he added.

"Take advantage of this incentive to expand your businesses. In doing so, you will be able to further contribute to Malaysia's economic growth," he said in his speech, before presenting the Enterprise 50 Awards, here Friday.

The Enterprise 50 is an annual awards programme organised by SME Corporation Malaysia (SME Corp) and Deloitte Malaysia, with other supporting sponsorships, to recognise the achievements of Malaysia's enterprising SMEs. The formation of the Asean Economic Community (AEC) will definitely offer great opportunities for Malaysian SMEs. As a single market with a population of 620 million, Asean's total trade is worth US$2.5 trillion (US$1=RM3.34) with an annual Gross Domestic Product (GDP) growth forecast of more than five per cent," he added. To further enhance the value chain activities, Mustapa said Asean and its neighbours, are negotiating to form a Regional Comprehensive Economic Partnership Agreement (RCEP). When concluded, RCEP will form a trading group with a market size of over three billion and a combined GDP of over US$21 trillion, contributing to almost half the global trade. Malaysian companies must embrace the AEC and East Asian integration. Economic integration will open new business opportunities and create greater value to our businesses.

Realising the importance of SMEs as the country's engine of growth, the government will continue to support SME development through the implementation of the SME Masterplan (2012-2020). The main objective of the Masterplan is to raise productivity, increase the number of high growth and innovative firms, as well as enhance the formalisation of businesses. SMEs played a crucial part in strengthening Malaysia's economic growth in contributing 33 per cent to Malaysia's GDP, and this is targeted to increase to 41 per cent by 2020.