The Sun Daily
11 October 2022
Budget 2023 – Measures to support small and medium businesses
THERE is no shortage of measures to support measures in Budget 2023 that was tabled in the Dewan Rakyat on Friday. SunBiz summarises the key takeaways.
Focus 1: Tax Deductions & Cash Grants
Proposes that the tax rate on chargeable income for the first RM100,000 be reduced from 17% to 15% This reduction will provide savings of up to RM2,000 each for approximately 150,000 MSME taxpayers; and
To assist micro small traders, it proposes to give a one-off grant of RM1,000 to all registered MSME and registered taxi drivers. It is expected that 1 million businesses will benefit from this grant with a total allocation of RM1 billion.
Focus 2: Financing Facilities
SemarakNiaga 2023 is enhanced with a total value of RM45 billion compared with the RM40 billion announced for 2022. This value includes direct loans, alternative financing and financing guarantees. Next year, RM1.7 billion will be available as microcredit loans and financing facilities to benefit small entrepreneurs, including:
- BSN microcredit loans with funds of RM950 million, which includes RM350 million for the Skim Penjaja Kecil Keluarga Malaysia, of which RM150 million is for bumiputra entrepreneurs;
- Loan facilities for small entrepreneurs under TEKUN, specifically for Bumiputera, women, youth, and the informal sector with an allocation of RM300 million;
- Financing facilities specifically for the Chinese community with an allocation of RM200 million with an interest rate as low as 4%;
- The Micro-funding scheme under the Indian Community Entrepreneur Development Scheme (or SPUMI) with a fund of RM25 million. RM100 million is also provided under Mitra, among others, for the development of entrepreneurs; and
- The iTEKAD social finance program provided RM10 million and was also matched with funds from financial institutions through zakat and cash waqf contributions.
Next year, RM100 million will be allocated for Tabung Modal Pusingan Suruhanjaya Koperasi Malaysia to provide funding to help cooperatives develop the agro-food industry. This effort is also supported by the Supply Chain Empowerment for Cooperative Program towards a consistent supply of food and consumer needs at lower prices.
Through Bank Negara Malaysia, RM10 billion in loan funds are provided to encourage the automation and digitization of SMEs and support the food security agenda and the recovery of the tourism sector.
Teraju, with a total allocation of RM135 million will provide financing support and facilities under the Dana Kemakmuran Bumiputera.
A total of 200 million worth of funds will be allocated under Perbadanan Usahawan Nasional Bhd to provide financing facilities and entrepreneur development programs for bumiputra in the retail sector.
The government agrees to extend 100% stamp duty exemption on restructuring or rescheduling loans or financing agreements until 2024.
Focus 3: Strategic Financings, Alternatives & Financing Guarantees
Through Bank Pembangunan Malaysia Bhd (BPMB). Various financing funds are offered with an interest subsidy of 1.5% per year.
- Sustainable Development Financing Scheme worth RM1.5 billion to facilitate the effort achieve the 17 sustainable development goals;
- Tourism Infrastructure Scheme amounting to RM1 billion to strengthen the recovery of the tourism sector, including funding for hotel rehabilitation, urban renewal, and heritage conservation; and
- Maritime and Logistics Scheme of RM1 billion, expanded scope to support Malaysia to support oil and gas, shipbuilding, and ship repair.
Continue the Rehabilitation and Support Through Equity faciity (or Reset) and Skim Modal Kerja through BPMB with a total fund amounting to RM1 billion, to provide support in the form of equity injection and working capital for high-potential companies affected by Covid-19.
For 2023, SJPP will provide financing guarantees of up to RM9 billion for SMEs, especially for strategic sectors such as agro-food, sustainable technology, tourism, and oil and gas. This guarantee initiative will continue to help SME companies to obtain new financing.
Equity crowdfunding (ECF) will continue to be supported, which provides capital funding to startup companies.
- To support start-up companies in the sustainability and social enterprise agenda, the government will provide Malaysia Co-investment Fund (MyCIF) funds amounting to RM30 million in addition to ECF funds; and
- Government plans to expand the scope of tax incentives for individual investors in start-up companies through equity crowdfunding to cover investments made through Limited Liability Partnership Nominee companies.