Malaysia’s Finance Minister, Lim Guan Eng recently tabled Budget 2020 on 11 October at the Dewan Rakyat, with the theme “Driving Growth And Equitable Outcomes Towards Shared Prosperity“. Here are the Budget 2020 highlights that are important for any Malaysian SME business owner, whether you own a retail, restaurant, or service-type business.
Photo of Minister of Finance, Lim Guan Eng tabling Budget 2020 at the Dewan Rakyat via Ministry of Finance/Facebook
GST will not be reintroduced
According to Finance Minister, Lim Guan Eng, the country’s inflation rate has been reduced to its lowest level since 2007, with the abolishment of the 6% GST in June 2018 and the introduction of the SST regime in September 2018.
On the topic of whether or not GST will be reintroduced:
“To respect the mandate given by the Rakyat in last year’s General Elections, the Government does not intend to bring back GST.” – Lim Guan Eng, Malaysian Minister of Finance
What about the Sales and Services Tax (SST)?
No SST revisions or updates were announced, so there isn’t much change in terms of the GST and the SST for SMEs. Phew!
Funding for SME entrepreneurs
The government is allocating the following funds for small business owners in Malaysia:
- RM445 million to support Bumiputera entrepreneurs in terms of access to finance, provision of business premises, and entrepreneur training
- RM100 million for the Chinese community for small business loans under Program Program Pembiayaan Usahawan Perusahaan Kecil Komuniti Cina
- RM20 million for Indian entrepreneurs under TEKUN National’s Skim Pembangunan Usahawan Masyarakat India (SPUMI)
Enhanced Skim Jaminan Pinjaman Perniagaan (SJPP)
Minister Lim Guan Eng also outlined enhancements made to the Skim Jaminan Pinjaman Perniagaan (SJPP):
- RM500 million allocation in guarantee facility for women entrepreneurs
- Government guarantee increase from 70% to 80% and guarantee fee decrease to 0.75% for Bumiputera SMEs, export-oriented SMEs, and SMEs investing automation and digitalisation
Two new government funds for up and coming entrepreneurs
“SME Bank will introduce two new funds where the Government will provide an annual interest subsidy of 2% to reduce borrowing costs…” – Lim Guan Eng, Malaysian Minister of Finance
The two funds to be introduced by SME bank are:
- RM200 million for women entrepreneurs with loans of up to RM1 million/SME
- RM300 million fund to support Bumiputera SMEs with the potential to become regional champions (priority given to halal products and manufacturers with high local content)
Digitalised SME benefits
In a bid to build a Digital Malaysia, the government will allocate funds to help SMes digitalise their business operations.
The government will provide a 50% matching grant of up to RM5,000/company for the subscription of any of the following services:
- electronic point of sale system (e-POS)
- Enterprise Resource Planning (ERP)
- Electronic Payroll System
The matching grant will be worth RM500 million over 5 years and is limited to the first 100,000 SMEs applying to upgrade their systems.
So, which of these initiatives are you most excited for as a Malaysian SME entrepreneur? Let us know in the comment section below!