FMM In The News: THE MALAYSIAN INSIGHT, Saturday, February 18, 2023 - THE Federation of Malaysian Manufacturers (FMM) has urged the government to act swiftly in enhancing small and medium enterprises’ (SMEs) competitiveness and productivity, public service delivery, and governance through Budget 2023, which is due to be presented in parliament on February 24.
FMM president Soh Thian Lai said the revised Budget 2023 should focus on these areas for the sake of the national economy and business dynamism.
“For example, to encourage domestic investment, we propose further government support for made-in-Malaysia products in government procurement and the introduction of special tax rebates for projects using locally manufactured products,” he said in an FMM pre-Budget 2023 commentary video today.
Given that government procurement accounts for one of the biggest purchases of domestic products, this could boost the industry as manufacturers would be willing to invest more when they are confident the government is prepared to buy their products, Soh said.
“Is the government willing to look into a government procurement act so that government-linked companies and government-linked investment companies are buying locally made products?” he asked.
In calling for greater support for the SMEs, he said the government should consider lowering corporate tax so SMEs can put their profits into further investments.
“We hope the tax rate will be between 13% and 15%,” he added.
Soh said he hopes the government will allocate enough funds for SMEs, adding that SMEs contribute to nearly 40% of the country’s gross domestic product.
“SMEs play an important role in the manufacturing and industrial services sectors. Even during the movement control order period when we faced a lot of global logistical constraints, and (during) the Ukraine-Russia conflict, the economy still functioned smoothly with adequate food on the table and goods delivered on time.
“The credit is due to local companies. Our local SMEs, through their capabilities and agility, are the backbone of the nation’s resilience,” he said.
The government should therefore not only focus on foreign direct investments, but also on domestic direct investments, he said.
He said domestic investments have been declining for the past five years.
“Some domestic manufacturers feel there is too much red tape, making them not confident to invest in new products,” he said, adding that the government should provide the right conditions and incentives to ensure manufacturers will continue to invest locally. – Bernama, February 18, 2023.