Small & Medium Enterprises Association (SAMENTA) remains hopeful that its proposal for 30 percent of government procurement to be allotted to Small and Medium Enterprise (SME) vendors will still be considered by the government for implementation in 2022.
This would not involve additional budget or funds on the part of the government as the procurement are for products and services that the government will be requiring anyway, SAMENTA said in a statement.
In welcoming the Budget 2022 as announced by Finance Minister Tengku Dato’ Sri Zafrul Tengku Abdul Aziz, Datuk William Ng, SAMENTA Policy and Government Relations and SAMENTA Central chairman said the budget is pro-growth and is timely in supporting businesses, especially SMEs, in recovery post-pandemic.
“We are glad that the government has heeded our plea for a wage subsidy for rehiring of workers. This is crucial as most SMEs who are on a recovery mood are cash strapped to procure raw materials and to re-hire workers. This has now been announced as JaminKerja with subsidy of up to 30 percent.
“For SMEs who are cash strapped, we are happy that the government has announced measures such as instalment for corporate income tax, as well as additional funds of up to RM 40 billion under the SemarakNiaga initiative,” Ng said.
Most importantly, SAMENTA is relieved that there are no new taxes imposed on businesses – at a time when most businesses are struggling and are only now getting on their feet.
“Overall, we would like to congratulate the Finance Minister and Finance Ministry for this pro-growth budget that’s clearly supportive of SMEs and sets the right tone for our economic recovery,” added Ng.
Voicing a similar sentiment, CIMB Group CEO Dato’ Abdul Rahman Ahmad said the bank is pleased to see the focus on Budget 2022 initiatives that will benefit the B40 group and businesses, especially micro, small and medium enterprises (MSMEs), the backbone of our economy.
“As Malaysia charts its recovery from the Covid-19 pandemic, we are pleased to see the Malaysian government’s commitment to drive inclusive and sustainable growth through its 2022 Budget, which looks set to strengthen the country’s economic resilience and rebuild market confidence.
“It is optimal that the government continues to emphasise policies that are aligned to the UN Sustainable Development Goals (SDGs). Through Budget 2022, the government has reiterated its goal to achieve carbon neutrality by 2050 and doubled down on its commitment towards driving the environmental, social and governance (ESG) agenda, through investments that will stimulate economic activities and growth whilst minimising harm to the environment and our communities,” he added.
This commitment includes ensuring alignment with green budgeting to ensure development projects and programmes that support climate resilience, and the provision of financing to support the low carbon transition.
Additionally, CIMB welcomes the government’s plans for sustainability sukuk issuance amounting up to RM10 billion in the year ahead to be channelled to qualified social and climate-friendly projects.
Standard Chartered Malaysia managing director and CEO Abrar A. Anwar lauded the move to enhance the provision by Syarikat Jaminan Pembiayaan Perniagaan (SJPP) by providing guarantees for rescheduled and restructured loans at a higher limit of RM10 billion to enable businesses to secure new financing, especially with digitalisation and automation proving to be crucial elements in business resilience.
The provision of over RM46 billion worth of guarantees by SJPP to-date has helped SMEs – one of the hardest-hit segments – tide over the challenges of the pandemic, said Abrar.
Additionally, he said Standard Charted is proud to align to Malaysia’s commitment to be a carbon-neutral nation by 2050, “as we commit to reaching net zero carbon emissions from our operations by 2030 and from our financing by 2050”.
Abrar said: “The Voluntary Carbon Market initiative cannot come at a more critical time as the planet faces one of its biggest challenges; climate change. Everyone has a role to play, and it’s encouraging to note that micro, small and medium enterprises (MSMEs) will be receiving assistance to implement sustainable and low-carbon practices into their business via a RM1 billion allocation from Bank Negara Malaysia.
“We welcome the allocation of MYR2 billion to attract foreign direct investments (FDIs) which will no doubt help to continue attracting quality investments to add value to the country’s economy. As facilitators of cross-border trade, we also welcome the provision of RM25 million provided to Halal Development Corporation (HDC) for halal advisory, advocacy, digitalisation and development to support local halal businesses thrive within the global halal ecosystem.”
Funding Societies Malaysia co-founder and CEO, Wong Kah Meng noted that Budget 2022 will spur the economic development of the country and give a much-needed boost to Malaysia’s MSMEs.
Wong also welcomed the move of Ministry of Finance to allocate RM80mil through Malaysia Co-Investment Fund to support alternative financing including equity crowdfunding and peer-to-peer financing.
“The government’s decision to allocate more funds into alternative financing will further support the needs of MSMEs who are underserved by traditional financial institutions and open up opportunities for businesses who have been adversely impacted by the pandemic,” said Wong
Funding Societies is also grateful that the government has also announced that scheduled payments for micro, small and medium enterprises can be deferred for up to six months until June 30, 2022, said Wong adding that the SME financing platform has its own deferment scheme.
Key Takeaways
- RM332.1 billion allocated under Budget 2022, the highest allocation compared with previous budgets
- RM233.5 billion allocated for operating expenditure under Budget 2022
- RM75.6 billion allocated for development expenditure under Budget 2022
A Boon For Business
- Bank Negara to allocate RM1 billion towards assisting SMEs in adopting sustainable and low-carbon practices
- SME Digitalisation Grant Scheme to be increased to RM200 million in 2022, with RM50 million for Bumiputera micro entrepreneurs in rural areas
- Govt to continue supporting equity crowdfunding and peer-to-peer financing with RM80 million allocation in matching grants under Malaysia Co-Investment Fund, in addition to Bank Pembangunan Malaysia Bhd’s RM100 million investment
- Matching grant of RM100 million for Bumiputera SMEs to explore aerospace industry
- SMEs allowed to postpone income tax instalments for six months until June 30, 2022
- Bursa to launch Voluntary Carbon Market as voluntary platform for carbon credit trading between green asset owners and other entities
- Govt, through the Securities Commission Malaysia, to make it compulsory for public-listed companies to have at least one female director on their boards
- Windfall profit levy threshold for crude palm oil prices to be increased from RM2,500 per tonne to RM3,000 per tonne for Peninsular Malaysia and from RM3,000 per tonne to RM3,500 per tonne for Sabah and Sarawak. The tax rate for Sabah and Sarawak will also be raised to 3%, in line with the rate in Peninsular Malaysia, when prices exceed the threshold.
- Govt to issue ringgit-denominated sustainable sukuk of up to RM10 billion, to finance eligible social or nature-friendly projects
- Govt announces RM3 billion Injection into pandemic-hit listed companies, RM2 billion for companies with gearing issues
- RM100 million for smart automation matching grants to benefit 200 manufacturing and services companies
- RM250 million allocated for Shop Malaysia Online and Go-eCommerce Onboarding
Empowering the People
- Education Ministry receives the highest allocation in Budget 2022 amounting to RM52.6 billion
- RM32.4 billion set aside for Health Ministry, second largest allocation after Education Ministry, with RM2 billion for vaccination expenses and RM2 billion for supplies
- Special tax exemption for building/commercial unit owners who give at least 30% rental discount
- 600,000 undergraduates from B40 families to get one tablet each, involving allocation of RM450 million
- Govt allocates RM2 billion to continue wage subsidy programme targeting 300,000 workers
- Targeted wage subsidies for employers in tourism industry who have seen their income reduced by at least 30%
- RM85 million for special assistance to over 20,000 registered tour operators
- Income tax exemptions for organisers of artistic and cultural activities, as well as sports competitions and international-level recreational activities, to be extended until 2025
- Govt to provide full exemption on import, excise duties and sales tax for electric vehicles
- RM1.7 billion in subsidies, incentives for farming and fisheries industries, including RM1.5 billion in subsidies for seeds and fertiliser
- RM700 million allocated to enhance digital connectivity in 47 industrial areas and 630 schools, especially those in rural areas
- RM20 million to be allocated to each state for projects related to food security, tourism, and nature conservation
- 1.3 million civil servants Grade 56 and below to get RM700 special financial aid each; 1 million govt retirees to get RM350 each, altogether to involve RM1.3 billion allocation
- Govt to introduce Cukai Makmur, a special tax on a one-off basis to companies generating high profits. The first RM100 million in taxable earnings will be taxed at 24% while the remainder will be taxed at 33% for the tax assessment year of 2022.
- Sales tax to be imposed on low-value items sourced overseas that are sold by online sellers and sent to Malaysia via air courier
- Services tax to be imposed on delivery services provided by service providers including e-commerce platforms, except for food and beverage deliveries and logistics services
- Govt to allocate RM6.6 billion for various initiatives under relevant ministries and agencies to strengthen and enhance technical and vocational education and training (TVET). RM200 million is also allocated for programmes such as the National Dual Training System and industrial certification programmes.
- Income tax exemption of up to RM3,000 for nursery and kindergarten fees
- Govt introduces Bantuan Keluarga Malaysia worth RM8.2 billion, to benefit 9.6 million recipients
- Govt to introduce excise duty on liquid, gel-based vaping e-liquids
- Ministry of Higher Education receives RM14.5 billion allocation in Budget 2022
- Special RM2,500 tax relief for purchase of handphones, computers and tablets
- JaminKerja initiatives to create 600,000 job opportunities with RM4.8 billion allocation
- PTPTN borrowers to get 10-15% discounts, depending on chosen repayment option
- Tax deductions of RM2,000 to RM7,000 for upskilling courses
- RM11.4 billion allocation for Bumiputera empowerment
- Govt to introduce excise duty on chocolate or cocoa, malt, coffee, and tea-based premix drinks containing sugar
- RM150 Early Schooling Assistance for each student; total allocation of RM450 million to benefit 3 million students
- RM400 million allocation for Supplementary Meal Plan (RMT) to ensure students get adequate daily nutrition
- Contracts of 10,000 medical, dental and pharmaceutical officers to be extended from two to four years
- 80,000 job placements in public sector, GLCs to be continued via MySTEP initiative
- eStart cashless transaction scheme to be introduced, which will see one-off RM150 deposited into e-wallets of those aged between 18 and 20
- Govt to fully bear cost of motor vehicle licences for the disabled (OKU)
- Income tax exemptions for winners of eligible e-sports championships
- Tax relief for cost of medical expenses/consultation involving registered psychiatrists, clinical psychologists, counsellors
- EPF to extend reduced minimum contribution rate of 9% until June 2022
- Govt to extend 100% sales tax waiver on CKD passenger vehicles and 50% sales tax exemption on CBU passenger vehicles, including MPVs and SUVs, until June 30, 2022
- Employers to get tax relief and exemptions on cost of booster shots
- Govt to allocate RM2 billion under housing credit guarantee scheme to assist those without steady income, such as gig economy workers, to purchase homes
- Daily milk program for poor students to be continued with RM400 million allocation
- Real property gains tax removed for house sales from sixth year onwards
