The government has no intention of imposing new taxes in the 2020 Budget, especially an inheritance tax, says Finance Minister Lim Guan Eng (photo, above).
He said there are rumours alleging Pakatan Harapan government intended to introduce an inheritance tax.
“It is unlikely. If there is one, it is just a follow up of what we have announced in the 2019 Budget,” he said during the Malaysia SME Business Summit in Kuala Lumpur today.
Speculation regarding the introduction of an inheritance tax has been swirling since prior to the tabling of the 2019 Budget, which the market feared would discourage investors’ interest, especially on Bursa Malaysia.
The government, however, did propose ways to increase its tax revenue, including via the special voluntary disclosure programme which allows taxpayers to voluntarily declare any unreported income, including those kept in offshore accounts.
Asked on the performance of small and medium enterprises (SMEs) during the first half of 2019, Lim said the government acknowledged the numerous challenges faced, including issues on access to financing and the rescheduling and restructuring of loans.
“Some companies want to reschedule their loans for a longer term so that they can improve their cash flow and will still pay on time, but the problem is some banks will classify them as a non-performing loan (NPL).
“That should not be the case and Bank Negara is going to inform the banks that they cannot classify the SMEs as NPL,” he said.
Earlier in his speech, the finance minister said the government has been supporting and nudging the SMEs towards digital transformation.
In February, the government launched a new guarantee scheme worth RM2 billion through Syarikat Jaminan Pembiayaan Perniagaan (SJPP) to help Malaysian SMEs make the leap towards Industry 4.0.
Additionally, RM1 billion is dedicated to assisting the Bumiputera SMEs, which is part of the RM6.5 billion SJPP guarantee scheme to ease access to financing.
“The government also provides a RM3 billion Industry Digitalisation Transformation Fund under Bank Pembangunan Malaysia to accelerate new technology adoption, including artificial intelligence, automation, big data and robotics among Malaysian companies”, Lim said.
The Finance Minister also said another challenge faced by the SMEs is the civil service.
“Sometimes they (civil servants) give problems. We still need to get them to support the government’s policies and initiatives. We do get a lot of complaints, (such as) deliberately making things difficult for business.
“You cannot change 61 years (of working in a certain way) in one year, so we hope the enterprises can be patient and let us deal with the problem step by step, stage by stage,” he said while emphasizing the need for SMEs to embrace the digital world.
In 2017, SMEs contributed 37 percent to the Malaysian gross domestic product and the figure is expected to rise to 41 percent by next year.
SMEs are also the biggest employers in the country, employing two-thirds of all workers in Malaysia and making up 98.5 percent of all business establishments in the country.