KUALA LUMPUR – With many small and medium enterprises (SMEs) still struggling with cash flow and business once again slowing down following the third wave of Covid-19 infections, business owners would be well advised to seize the opportunities provided by the Ministry of Finance.
Budget 2021 was announced on 7 November with its theme “In Our Strength Lies Our Collective Victory.” It anchors on three thrusts, namely the Rakyat’s well-being, business continuity and economic resilience.
Home-grown accounting, tax and business advisory firm, YYC Group believes that the targeted action plans have the potential to create possibilities for SMEs to recalibrate and recover from the current hit caused by the pandemic.
Group CEO Datin Yap Shin Siang said that with the four economic stimulus packages offered in the past amounting to RM305 billion, the additional initiatives show that the government is working towards reviving the SMEs, albeit in ways that are not as straightforward.
“The 2021 Budget prioritises the Rakyat’s well-being and trusts the business community to think critically and find solutions. We see a huge opportunity for local SMEs to upgrade and profit upon – especially in terms of digitalisation.”
The measures formulated in the 2021 Budget has laid clear the intention to democratise technology across all levels of society to empower people and businesses to learn, innovate and thrive. With only less than half of Malaysian SMEs using ICT tools in their businesses, the firm believes that the grants allocated will help local business owners enhance their capabilities and capacity.
“In Malaysia, SMEs comprise 98.5 percent of business establishments and contribute over 38 percent of the country’s Gross Domestic Product (GDP), making it the backbone of the Malaysian economy. For SMEs to gain competitiveness, adoption of digital and IR4.0 technology is the key.”
“There are opportunities to seize from the Industrial Digitalisation Transformation Scheme and SME Digitalisation Grant Scheme and Automation Grant, but SMEs will need to be strategic in their proposals when they apply. We urge local businesses to take advantage of the grants allocated to focus on digital marketing and leverage digital technology to enter new export markets,” said Yap.
Business owners who are concerned about their employees’ digital proficiency should take note of the up skilling initiatives in the budget. The allocation of RM100 million for training programmes through HRDF will enable traditional Malaysian businesses to embrace digitalisation and address their common pain points.
“The amendments made to EPF contributions and withdrawals, Bantuan Prihatin Rakyat, e-wallet credits and the reduction of personal tax rate are measures aimed to boost consumer spending. So, this is a critical time for SMEs to up their game through market, product, offer and business model innovation,” said Yap.
Business financing woes have not gone unheard either, with the budget containing additional aids from micro credit financing, loan guarantees through Syarikat Jaminan Pembiayaan Perniagaan (SJPP) and an income tax exemption of 50% of the invested amount or limited to RM50,000 to encourage investors to participate in equity crowd funding.
Read more: PM: Budget 2021 to be expansionary to support people, revive economy
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