THE continued rise in diesel prices, coupled with increasing raw material, transportation, and operating costs, is placing local small and medium enterprises (SMEs) under unprecedented pressure.
At this stage, what businesses need most is not one-off financial assistance, as temporary subsidies only provide short-term relief and do not fundamentally improve the business environment.
Instead, the government should consider reducing tax burdens, simplifying licensing procedures, and waiving unnecessary fees, measures that would have a more direct and meaningful impact on restoring business confidence.
Higher diesel prices have significantly increased logistics and transportation costs, while fluctuations in raw material prices continue to squeeze profit margins.
At the same time, the growing burden of local licences, renewal procedures, administrative charges, and compliance requirements has made it increasingly difficult for SMEs to operate.
Traditional retail businesses, small food and beverage operators, logistics companies, and service industries are among the hardest hit.
To address these challenges, MCA proposes several measures:
- Simplify and digitalise application procedures to reduce unnecessary bureaucracy and duplicate documentation.
- Review and reduce local licensing and administrative fees, including introducing nominal charges where appropriate.
- Expedite approval processes to prevent delays that disrupt business operations.
- Work closely with local business associations and civil society organisations to improve communication and ensure policies better reflect grassroots concerns.
- Ensure enforcement is carried out fairly and transparently, without unnecessarily burdening law-abiding businesses.
- Consider temporary income tax exemptions or targeted tax reductions for affected sectors to ease financial pressure and restore market confidence.
The government should not rely solely on short-term subsidies or one-off assistance measures, as these do not provide sustainable solutions.
What is needed are reforms to taxation, licensing, and administrative systems that genuinely reduce operating burdens and eliminate unnecessary red tape.
In many cases, businesses are not asking the government for financial handouts.
What they want is for policies not to further increase their burden.
Reducing tax pressure, lowering licensing fees, simplifying procedures, or waiving unnecessary charges would already provide significant relief and help strengthen confidence among business operators.
Furthermore, with the global economic outlook remaining uncertain, any large-scale collapse of local SMEs would not only affect employment but also weaken the broader national economic ecosystem.
SMEs have long been a key pillar of the economy, and widespread business closures would disrupt supply chains, consumer activity, and local economic development.
It is time for the government to seriously address the real challenges faced by local businesses.
Only by effectively reducing operating costs and easing regulatory burdens can local enterprises weather current difficulties, protect livelihoods, and support the long-term stability of the national economy.
DATUK LAWRENCE LOW
MCA Vice President, MCA Economic & SMEs Affairs Committee Chairman
