Announce stimulus package to help SMEs, PKR MP urges govt

Summary

• PKR MP Lee Chean Chung urges Putrajaya to announce an economic stimulus package amid global economic volatility to help local SMEs.

• He points out that although the US has postponed the reciprocal tariff, the impact of the 10 percent base tariff is already affecting several local industries.

• Lee also urges Putrajaya to crack the whip in collecting taxes from foreign companies operating in Malaysia.

PKR MP Lee Chean Chung urged Putrajaya to announce an economic stimulus package amid global economic volatility amid the tariffs announced by the US last month.

The stimulus package, Lee (above) added, should be announced during the special Parliamentary sitting scheduled on May 5 and target particularly small and medium enterprises (SMEs).

“In addition, the US reported a contraction in its gross domestic product for the first quarter of the year, which has worried investors and affected global market sentiment.

“And US President Donald Trump’s move to postpone the reciprocal tariff by 90 days is not helping. It’s only postponing the pressure, not alleviating it,” the Petaling Jaya MP said in a statement today.

On April 3, Trump slapped many countries, including Malaysia, with tariffs in a move to address the republic's trade deficit.

In addition to a base tariff of 10 percent, there is also a reciprocal tariff. Malaysia is being slapped with 24 percent.

Amid international backlash, the Republican leader decided to postpone the reciprocal tariffs but maintain the base tariff.

M’sian economy already sluggish

It should be noted that even before Trump announced the tariffs, Bloomberg reported that Malaysia’s economy missed its growth target.

Malaysia’s GDP rose 4.4 percent in the January-March period from a year earlier, according to advance estimates from Malaysia’s Statistics Department.

However, the figure is below the 4.8 percent median estimate in a Bloomberg News survey, marking a third straight quarter of slower growth.

The disappointing data comes as policymakers review the official 4.5 percent to 5.5 percent growth forecast for 2025 on uncertainty over global trade.

Boosting SMEs

On that note, Lee said the government should include the following measures to help boost SMES, such as:

• SME Tariff Relief Fund, which would provide low-interest financing and a subsidy to affected companies to manage raw materials costs and adjust their businesses according to market conditions.

• Export Market Adjustment Grant, which will provide technical support through the Malaysia External Trade Development Corporation (Matrade) and help companies to expand to new markets in Asean, the Middle East and European Union.

• Postpone the expansion of the Sales and Services Tax for six months to stabilise companies’ cash flow.

Be strict in tax collection

Lee also called upon the authorities to enforce tax laws strictly on all foreign companies operating in Malaysia, regardless of the size or nation of origin.

“We cannot allow them to exploit the situation to evade paying taxes.

“Not only does it affect our coffers, but also impedes healthy competition in the market,” he added.

Lee cautioned that many industries are already feeling the impact of the 10 percent base tariff, such as those involved in furniture, rubber products and optical equipment.

As such, some companies have postponed their investments and new hires due to the uncertainty.

“If we don’t act now, we may face a new wave of unemployment soon,” he added.

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