Following the Malaysian National Budget 2025 announcement last Friday, many are commending the allocations and the initiatives introduced by the government, with one of them being an increase of minimum wage to RM1,700 from the previous RM1,500.
However, the Small and Medium Enterprises Association (SAMENTA) Malaysia president Datuk William Ng expressed concern that the minimum wage is coming at a time of compressed margin for SMEs and will be disruptive to their operations.
“SMEs in Sabah and Sarawak in particular, will find it difficult to implement the minimum wage and we can expect substantial job loss as a result of this new announcement.
“In urban centres like the Klang Valley, southern Johor and Penang, median wages are already far higher than even the RM1,700. Beyond job loss, we will see further wage compression among the M40 with foreign workers being the biggest beneficiary of the revised minimum wage,” he added.
On the 2% dividend tax, Ng said it would hurt SME owners disproportionately as the bulk of dividends will go the SME owners, not some silent investor as in the case of listed companies.
“Many SME owners do not draw salaries due to the tight cash flow, (which is) experienced by most SMEs in recent years.
“As such, taxing them on dividends from income that is already taxed is not only a form of double taxation, but (it) will discourage SMEs from growing their business or turning in higher profits,” he said, urging the government to consider exempting SMEs from the 2% tax on dividends.
Meanwhile, Funding Societies Malaysia country head, Chai Kien Poon said that the company is encouraged to see measures to support micro SMEs (MSMEs) to accelerate economic growth while remaining people-centric and focused on equitable distribution, sustainability and high-quality development.
“Continued support for MSME digitalisation through initiatives like the Digital Matching Grant for SMEs and Digital Grant for Vendors is also essential.
“While some Malaysian SMEs are thriving by adapting to digital trends and evolving market demands, many still encounter significant challenges, particularly in accessing financing, managing costs and navigating the increasingly digital landscape,” he said.
At the same time, Paywatch Malaysia co-founder and president Alex Kim said the budget’s emphasis on supporting SMEs through tax incentives, investing on digital infrastructure and rolling out financial literacy programmes nationwide is essential to keeping this momentum going and ensuring long-term resilience.
Budget 2025 Supports Women Participation in SMEs
The government also allocated RM470 million for financing funds provided by SME Bank, Bank Simpanan Nasional (BSN), Bank Rakyat and MARA support women-led SMEs to obtain working capital, purchase assets and increase business capacity to a higher level.
According to Prime Minister Datuk Seri Anwar Ibrahim, the Women’s Leadership Apprenticeship Programme (PERANTIS) – an initiative to encourage women to return to work – will be intensified under the Ministry of Women as an effort to produce more female corporate personalities.
“The Returnship Programme will be initiated to encourage women to return to work in the financial sector. This programme organised by Bank Negara Malaysia (BNM) and the Malaysian Securities Commission (SC) will provide training facilities and then connect with potential employers who are suitable for returning to work,” Anwar said during the Budget 2025 announcement.
He also revealed that the government plans to offer an additional 50% tax exemption to employers who employ women to return to work after pursuing their education through financial assistance for a period of 12 months.
