Deputy Finance Minister II Steven Sim has commented that the upcoming Budget 2024 will be centred on assisting the M40 group as well as small and medium enterprises (SMEs). This is as both groups still need to be empowered following the lingering economic after-effects of the Covid-19 pandemic.

“Due to the Covid-19 pandemic, 20% of the M40 group has fallen into the B40 category. They are the economy generators and workforce, and they are the ones who will spend in the local economy. We want to empower them,” said Sim. Similarly, he stressed that SMEs make up 98% of Malaysia’s economy, and are, therefore, a major contributor to the country’s national income (GDP).

Sim also noted that Budget 2024 – which will be based on the key strategy of increasing the ceiling and ground limit of the economy – aims to assist entrepreneurs in restructuring and adding value to their industries. Additionally, the government hopes to bring high-tech and high-value industries into the country.

“We do not want businesses to just prosper, but also to be healthy, strong and smart, so that they can compete regionally and globally. When industries and businesses have higher-added value, they can pay better wages, preventing workers from leaving for other companies or countries. When businesses offer better wages, more job opportunities can be created, which will then improve tax collection and allow better infrastructure to be built,” said Sim.

Aside from that, Sim also confirmed that the goods and services tax (GST) will not be reintroduced under Budget 2024 yet, given that the economy is still in its recovery phase. If the GST is reintroduced, the prices of raw materials and items will inadvertently go up, and this will only add to the financial burden of the B40 and M40 groups – including single parents and young households – he said.

“Certain quarters have their reasons for wanting GST as some can make claims, but we see not just from their point of view, but on a wider perspective. It is also not good to say it is good or likewise, but it’s just not the right time for it,” Sim stated, adding that the government is not considering reintroducing the GST at a lower rate either since there are still other ways to increase the country’s revenue.

The reintroduction of the GST has been mooted by several quarters since early 2020, but it has not materialised to date – with Prime Minister Datuk Seri Anwar Ibrahim stressing in January 2023 that he is not in favour of reinstating or introducing taxes that could worsen the plight of the low-income group at present.

(Source: The Star)

• TAGS:
• Budget 2024
• Goods And Services Tax
• GST
• M40
• M40 Households
• MSMEs
• SMEs
• Steven Sim Chee Keong