Breaking Down Budget 2024: The Need-To-Knows For Malaysian SMEs

For all our entrepreneurial friends, we know how much information you have to sift through every year when the national budget plans are announced. Don’t worry! We’ve got your back with a quick rundown here of all the SME-related initiatives that were announced in the Budget 2024 tabling.

Firstly, let’s talk about all things tax:

??Considering our country’s continued efforts in digitalisation, it’s honestly no surprise that e-invoicing is becoming a mandatory requirement for taxpayers with an annual income or sales of over RM100 million.

??Our sales and services tax is going up, up, up! We’ll be seeing it increase to 8% in 2024 from the current 6%, but this won’t affect essential services like F&B and telecommunications.

?Social enterprises will see an extension on their tax exemption application period until 2025. This will primarily apply to applications that were received by the Ministry of Finance from 1 January 2022 until 31 December 2023 (so get yours in soon if you haven’t already!).

Now, let’s look at the funds and loans that SMEs and MSMEs can utilise:

??The government is allocating RM44 billion for MSME-focused loans and financing guarantees, with another RM2.4 billion provided as small loan facilities for micro-entrepreneurs and small traders through agencies like Bank Simpanan Nasional (BSN), Tabung Ekonomi Kumpulan Usaha Niaga’s (TEKUN), and of course, Bank Negara Malaysia (BNM).

??Speaking of BNM, they will also provide a separate amount of RM8 billion in loan funds for SMEs!

??We’ve also got a few targeted initiatives and programmes, including:

RM100 million for microcredit organisation Amanah Ikhtiar Malaysia (AIM)

RM1.6 billion worth of loan facilities and guarantees for bumiputera MSME entrepreneurs

9 financial institutions offering special financial programmes for halal SMEs

A RM50 million special financing facility for disabled microentrepreneurs

Additional funds for the iTEKAD social finance programme

And finally, additional funds of up to RM25 million in matching grants with financial institutions to benefit more entrepreneurs

Naturally, automation and digitalisation will be supported, too:

??RM100 million has been proposed for digitalisation grants (capped at RM5,000 for each entrepreneur) that should allow more than 20,000 MSMEs to upgrade their sales, inventory, and digital accounting systems.

??BNM is also providing RM900 million in loan funds for SMEs to increase business productivity through automation and digitisation.

??There’s also another RM40 million allocated for the Shop Malaysia Online programme, designed to incentivise small traders to switch to e-commerce.

??Digital Economy Centres (PEDi) in each state constituency will be given RM25 million for enhancements, also to support small entrepreneurs who sell their products online, especially in rural areas.

???Finally, we’re looking at an increase from 20% to 40% regarding the capital allowance on ICT equipment and computer software, and the time frame for companies to claim this will also be reduced from four to three years.

Briefly, we’ve got an update on government guarantee schemes by Syarikat Jaminan Pembiayaan Perniagaan Berhad (SJPP):

??A total fund of RM20 billion will be provided to SJPP so they can further provide guarantees for up to 80% of loans by entrepreneurs, with special attention to those who are involved in the green economy, technology, and halal sectors.

And of course, we’ve got to look at our country’s talent & skills development:

????RM1.6 billion will be provided to the Human Resources Development Corporation (HRD Corp) to train 1.7 million workers.

??Also, using 15% of the total levy collected, HRD Corp will also reallocate funds to implement the MADANI Training Programme for MSME entrepreneurs and vulnerable groups (including ex-prisoners, the disabled, as well as the elderly and retirees).

??Last but not least, RM20 million will be provided to continue SME Corp Malaysia’s Tunas Usahawan Belia Bumiputera Programme (TUBE), which has helped to produce more than 7,000 youth bumiputera entrepreneurs through training workshops and a “buddy system” programme.

Phew! Quite a lot to cover. For us here at Elliot & Co, not only are we an enterprise ourselves who take a personal interest in these matters, but part of our job is to help other companies and media folk to parse through heaps of information as well. So let us know what you think of the SME and MSME-focused offerings from Budget 2024. Is it enough? Is it covering the right sectors? Are you going to use any of these resources? Get in the comments!

H/T to our pals at RinggitPlus for the numbers!