THE Small and Medium Enterprises Association (Samenta) Malaysia has expressed happiness with the goodies announced in Budget 2020.
Its secretary S.H. Yeoh said the allocation of up to RM1bil to encourage more global unicorns or Fortune 500 companies to invest in Malaysia would create economic spill-over effects for SMEs supplying goods and services to them.
He also welcomed the move to allocate RM550mil as smart automation matching grants to 1,000 manufacturing and 1,000 services companies to automate their business processes, and the 50% matching grants of up to RM5,000 per small-and-medium enterprise (SME) for the digitisation of their operations such as electronic point of sale systems.
“The SME manufacturing sector will benefit from the move to extend till 2023 on the assessment for the accelerated capital and automation equipment capital allowances incurred on capital expenditure.
“This will free up their cash flow for design and development activities, ” Yeoh said.
He, however, said the Federal Government needed to cut down red-tape and expedite the application processes.
“There must be transparency in the approval process, ” he added.
In Budget 2020, Finance Minister Lim Guan Eng said the Federal Government would allocate up to RM1bil of customised packaged investment incentives annually over the next five years to attract investments from Fortune 500 companies in high technology, manufacturing, creative and new economic sectors.
To qualify, Lim said these companies need to invest at least RM5bil each in Malaysia, which will generate additional economic activities to support the SMEs, create 150,000 high-quality jobs over the next five years, and strengthen our manufacturing and service ecosystems.
Meanwhile, Malaysian American Electronics Industry (MAEI) chairman Datuk Seri Wong Siew Hai said the budget gave full recognition to the importance of the electronics and digital industries.
“The allocation of RM1bil worth of customised packaged investment incentives for the next five years is a strategic move as this is the way to grow the high technology area, ” he added.
Free Industrial Zone, Penang, Companies’ Association (Frepenca) committee member Datuk Heng Huck Lee said the Federal Government has finally listened to the electronics industry.
He said the RM550mil allocation as smart automation matching grants would spur the adoption of Industry 4.0 in the country.
“Budget 2020 provisions for the high technology sector will boost the performance of the electronics industry in the country.
“It comes at a very timely moment as our competitors in the region have been courting aggressively after foreign direct investments.
“In fact, we have been losing out to them, ” he says.
Under Industry 4.0, manufacturing technologies will gradually integrate automation and processes such as cyber-physical systems, the internet of things and cloud computing.
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