Manufacturing sector lauds incentives to boost SME growth
Malaysia, which is is expected to rise in global market rankings with the new budget programmes and incentives. KUALA LUMPUR: The manufacturing industry welcomes the numerous programmes and incentives focused on the development of small and medium enterprises (SMEs) as announced by the Prime Minister Datuk Seri Najib Razak in his 2017 Budget speech.
The Federation of Malaysian Manufacturers (FMM) in its statement yesterday said the initiatives include the export promotion funds, insurance credit facilities, the two per cent rebates on interest rates charged to SME borrowers, the reduction in corporate tax rate from 19 per cent to 18 per cent, extension of incentives for vendor development and additional schemes to support start-ups.
“All these programmes and additional funds are expected to boost further development and growth of SMEs and entrepreneurship,” it said.
Malaysian Employers Federation executive director Datuk Shamsuddin Bardan said the incentives given to anchor companies under the vendor development programme are important to keep the supply chain intact and sustainable in the long run.
During the tabling of the 2017 Budget, Najib said the double deduction on expenses incurred by the anchor companies will be extended until December 31 2020 to boost the local vendor development programme.
The stronger emphasis on chemicals,
Datuk Shamsuddin electrical and electronics (E&E) and research and development (R&D) activities — under a RM522 million fund allocation to the Malaysian Investment Development Authority — Shamsuddin said these are the sectors that are crucial in the country’s bid to move up the value ladder and increasing its global competitiveness.
“These are the critical sectors that are seen to be viable, especially in the government’s effort to move Malaysia up the value chain.
“Malaysia is already established in the E&E sector. And I think the incentives will enhance our economic position in the global market,” he said.