KUALA LUMPUR – The upcoming Budget 2022 must focus on the survival issues of small and medium-sized enterprises (SMEs), said Small and Medium Enterprises Association (SAMENTA).
In its budget wishlist, SAMENTA central chairman Datuk William Ng said the association has suggested that personal income tax for 2021 should be exempted for those with a gross income below RM80,000.
“This will stimulate spending among the M40 as the economy rebounds,” he said in a statement on October 5.
Ng said the association also suggested that the government lowers the sales and service tax (SST) to a flat rate of 4% to stimulate consumer demand, reduce administrative work among businesses and the Customs Department.
“This could also be a precursor for our proposal to re-introduce the goods and services tax (GST) at 4% from 2023 onwards,” he said.
Ng also called on the government to reduce the corporate tax rate for SMEs for the first RM 500,000 taxable income for 2021 and 2022 to 15% as the move would encourage re-investments and promote entrepreneurship to quickly fill the void left by collapsed SMEs.
“Waive the Human Resources Development Fund (HRDF) levy until June 2022 and reduce the levy to 0.5% until June 2023, because as at end-2019, HRDF has RM 1.35 billion in the retained levy.
“We certainly can afford to exempt SMEs from levy payment in 2021 and a part-waiver in 2022, without jeopardising our mandate to upskill our workers,” he said.
Ng also urged the government to not distinguish between “essential” and “non-essential” businesses, as all businesses are interconnected to some degree.
The association also called on the government to stop all mass tax audit operations for suspected tax evasion pre-2019 until 2023 to allow the SMEs a reprieve to turn around in 2022 and 2023.
“If the Inland Revenue Board Of Malaysia (LHDN) wishes to crack down on tax evasion, this can be done when the economy has sufficiently recovered,” he proposed.
Other items on the wishlist included extending the RM 600 wage subsidy until June 2022 for all sectors that were deemed non-essential, for instance, those which were not allowed to operate until Phase 3 and 4 of the National Recovery Plan, and extending the hiring incentive of 50% wage subsidy for six months to SMEs with less than 100 employees until June 2022.
He also suggested that the government set aside 30% of government procurements for SMEs to compete among themselves under an open tender and a direct e-procurement portal.
Budget 2022 will be tabled in Parliament on October 29.
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