PETALING JAYA: The Small and Medium Enterprises Association (Samenta) yesterday said the prime minister’s decision to mandate rental reductions for premises managed by Majlis Amanah Rakyat (Mara) and Urban Development Authority (UDA Holdings Bhd), while urging local authorities to follow suit, is a clear demonstration the government is listening to the grouses of their SMEs.
National president Datuk William Ng said this proactive measure is a timely lifeline for small business owners and petty traders who are currently grappling with the global supply chain and energy crisis.
However, Samenta warned that the SST on commercial rentals and dividend tax risk wiping out these gains.
“We urgently call for a postponement of these taxes until 2027 to prevent a ‘give with one hand, take with the other’ scenario,” it said.
The severity of these pressures is underscored by a recent Samenta flash survey, which revealed a deepening crisis for their SMEs with 93% of respondents already feeling the impact of rising costs; 38% reporting that their costs have surged by more than 11%; 45% absorbing the increase by cutting their already thin margins, while 14% remain undecided on how to survive the escalating costs.
Despite these spikes, the survey also revealed that only 17% have raised their prices to consumers.
“While we appreciate the measures introduced to date, including additional funding support, higher guarantee threshold under SJPP (Syarikat Jaminan Pembiayaan Perniagaan) and today’s announcement on rental reduction, the two major and immediate cost impediment to our SMEs are the SST on rental and the two percent tax on dividend,” said Ng.
Samenta outlined three critical reasons for a postponement to 2027 – postponing SST on rentals ensures the prime minister’s relief measures stay in the pockets of SMEs rather than being diverted back into tax coffers during a global energy crisis; SME owners often take minimal salaries to protect jobs, relying on dividends as their primary income.
Taxing these dividends, effectively a double tax, drains the very capital needed for automation and digitalisation to survive this prolonged energy crisis and with global supply chains in flux, a moratorium on new taxes until 2027 provides the fiscal breathing room needed for SMEs to plan expansion and hiring with certainty.
Samenta said it remains committed to working alongside the government to realize the goals of the Madani Economy.
“We believe that by combining the current relief efforts with a postponement of the taxes on rental and dividend, we will help our SMEs better prepare for and fight the on-going crisis,” said Ng.
