GEORGE TOWN: The income tax reduction for small and medium enterprises (SMEs) is a plus but could be higher, says Small and Medium Enterprises Association Malaysia (Samenta) national secretary Yeoh Seng Hooi (pic).
“It is a plus when there is any reduction. However, the quantum of RM100,000 is too small.
“We had appealed for up to RM500,000 or RM1mil,” he said.
The Budget 2023 announcement of income tax for SMEs being reduced from 17% to 15% for the first RM100,000 earned is set to benefit 150,000 taxpayers from SME businesses.
Yeoh said the reduction in personal income tax by two percentage points for those in the RM50,000 to RM100,000 income group and the cash transfers to B40 will hopefully offset the higher finance costs for loan servicing due to overnight policy rate (OPR) hikes.“Hopefully, their disposable income will be less impacted and consumer spending will be sustained. This augurs well for SMEs,” he added.
He said the guarantee limit of up to RM9bil via Business Financing Guarantee Company would enable SMEs to have easier access to financing.
“This is particularly important for those who do not have collateral in line with the changing business model for those in the digital or services sectors,” he said.
Yeoh also noted that the RM1bil grant worth RM1,000 for each recipient in registered micro-SMEs might not be significant for small and medium-sized businesses but would certainly benefit the micros.
Although he feels that more could be done, Yeoh said the Budget had been targeted in the right areas.“It is important to look at the different kinds of SMEs as some are still in recovery mode, like tourism and food and beverage.
“These SMEs will probably need some support to soften the load to rebuild their businesses.
“For those who were less impacted and are still doing well, they can ride the momentum of this Budget.
“With the higher cost of living due to inflation, it dampens the spending capacity of people, so the reduction of income tax and other incentives for the B40 group will help the retail sector continue to see some growth,” he added.
