19/06/2025

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THURSDAY | JUNE 19, 2025 SCAN ME Samenta credits govt, business efficiency

goal of breaking into the top 12 of the ranking by 2033. “To further enhance our competi tiveness and move up the ranking, we need to strengthen digital trans formation, improve skills and educa tion, cut bureaucracy, provide policy consistency and boost research and development initiatives. “Providing greater incentives and support for companies, especially SMEs, to leverage technology and innovate is key. Ensuring policy stability and reducing red tape will help businesses operate more effi ciently and respond faster to market opportunities,” he remarked. Ng said these efforts require a whole-of-nation approach as the government alone cannot affect these reforms. Businesses, he added, including SMEs, must move up the value chain in order for Malaysia to become even more competitive and to future-proof the economy for generations to come.

Perception Index Task Force, chaired by the chief secretary to the govern ment, is tackling corruption and strengthening institutional integrity. Furthermore, Ng said, the Busi ness Efficiency Task Force, led by Malaysia Productivity Corporation, is hard at work identifying bottlenecks and improving the ease of doing business across sectors. “All these initiatives collectively create a more stable, efficient and forward-looking ecosystem for companies to operate and grow.” The inclusion of Samenta and SMEs in some of these efforts, including the Business Efficiency Task Force and various productivity initiatives, is indicative of the govern ment’s desire to drive the economic reform at all levels, including among their small and medium enterprises, said Ng. “While we celebrate this progress, we must not become complacent. More needs to be done if we are to realise Ekonomi Madani ’s ambitious

o Malaysia’s surge in global competitiveness due to significant progress in fighting corruption, boosting private investment in R&D, reducing bureaucracy and strengthening employment, says SME association

PETALING Malaysia’s achievement in climbing 11 positions to 23rd spot in the 2025 World Competitiveness Ranking under scores the strong policy measures and reforms implemented by the government and businesses in strengthening the economic funda mentals and making the nation more competitive on the world stage, said Small and Medium Enterprises Association of Malaysia (Samenta). Samenta national president Datuk William Ng remarked: “The rise, the highest among all participating eco nomies, reflects progress across key areas of competitiveness, in particular government and business efficiency, both of which improved by eight ranks.” JAYA:

Indonesia (40th) and the Philippines (51st). Our progress underscores our ability to implement reforms effectively and signals to investors and businesses that Malaysia con tinues to be a leading destination for investment and growth in Southeast Asia,” he added. Ng said recent initiatives have played a key role in this progress, especially the rollout of Reformasi Kerenah Birokrasi , which has helped cut red tape and simplified procedures for businesses and citizens. The Akta Iltizam passed by Parliament in March underscores a strong legislative resolve to ensure efficiency in the public sector, he said, adding that the Corruption

Notably, he said, Malaysia has improved significantly in eradicating bribery and corruption, boosting private investment in R&D, reducing bureaucracy and strengthening em ployment. “Malaysian businesses have demon strated greater adaptability, productivity and innovation, making our companies more competitive. The country’s strong economic growth, low inflation and healthy employment conditions all contribute to this upward trajectory,” said Ng. “Malaysia’s improvement is particularly noteworthy when we consider it within the Southeast Asia context. Among Asean members, we now outperform Thailand (30th),

‘Fiscal reform for financial sustainability, social equity’ KUALA LUMPUR: The government’s fiscal reform initiatives, including expanding the scope of the Sales and Services Tax (SST) and rationalising electricity and diesel subsidies, are aimed at ensuring fiscal sustainability while protecting lower-income groups and essential sectors.

ADB: Malaysia at centre of Asean Power Grid efforts

KUALA LUMPUR: The Asian Development Bank (ADB) has described Malaysia as being “really at the centre” of efforts to accelerate the long discussed Asean Power Grid (APG) initiative, citing growing momentum in power trade involving Malaysia, Singapore, Indonesia and Vietnam. ADB regional director and head of the Singapore office Jackie Surtani said the region is finally seeing concrete steps being taken to connect national grids and enable cross-border electricity flows after three decades of discussions. “There is a fantastic opportunity at the moment for Asean to come together. And the way for Asean to come together is to start connecting your grids, and this is what we call the Asean Power Grid. “We have been talking about the APG for 30 years and I am now very encouraged by the momentum we are seeing, particularly here in Malaysia and Indonesia, working closely with Singapore,” he said during a panel session “Building Climate Journey: How Wide Ranging is the Funding Mechanism?” at Sasana Symposium 2025 here yesterday. Surtani noted that ADB is advising the Energy Market Authority of Singapore and pointed to increased discussions on bilateral and trilateral electricity trade. Surtani urged Malaysia to take advantage of the current regional environment and under scored the importance of strengthening both domestic and cross-border infrastructure. “What Malaysia can do is to take advantage of the current environment. This power grid is something that our president (in ADB) announced formally that we would like to commit US$10 billion (RM42.5 billion) over the next decade to the APG. “If you look at Europe and the US, their grids are connected. Malaysia may be a bit luckier than some other countries, but do not forget, you need to strengthen your grid as well,” he said, adding that domestic grid strengthening is key, and once that is in place, cross-border connectivity presents a huge opportunity to make regional integration happen. – Bernama

Treasury secretary-general Datuk Johan Mahmood Merican said one of the key fiscal reform elements is the Fiscal Responsibility Act, which aims to reduce the government’s fiscal deficit to 3.8% of gross domestic product (GDP) in 2025 and to 3% by 2028. He said that what has gained attention in recent weeks is SST, and the idea is to approach it in a more targeted manner, which Prime Minister Datuk Seri Anwar Ibrahim said reflects the spirit of social protection. “How do we then try to approach it more progressively? It is the government that needs to provide additional funding. “We need to increase our tax base as our tax-to-GDP (ratio) is about 12.5%, which is amongst the lowest in this region,” he said during a session titled “Social Safety Nets: Securing the Future” at the Sasana Symposium 2025 hosted by Bank Negara Malaysia yesterday. Johan said there is room to increase the tax base for the sustainability of expenditure, as well as growing demands for social protection and basic infrastructure. Thus, there is a need to increase the tax base in a progressive manner, where the government must ensure that basic daily goods are not subject to higher SST. He also noted that from an equity standpoint, it appears highly counterintuitive to allocate the same amount of assistance to both low-income and high-income indi viduals. As such, the government typically adopts a more targeted approach as part of its broader reform agenda to ensure that aid reaches those who need it most. He noted that the government allocated RM10 billion for Sumbangan Tunai Rahmah in 2024, and this year the allocation has increased to RM13 billion, which includes another aid assistance programme called Sumbangan Asas Rahmah .

Johan (right) getting a first-hand view of operations during his visit to the Royal Malaysian Customs Department in Petaling Jaya yesterday. – BERNAMAPIC

revenue base. “The government has taken a progressive approach by expanding the tax base, with the tax burden being skewed towards those who can afford it. This means that when determining the scope and those who are subject to the service tax, as well as the sales tax approach, efforts have been made to ensure it is implemented in a targeted manner,” he said after a visit to the Royal Malaysian Customs Department in Petaling Jaya. The scope of the service tax will be expanded to include new services such as leasing or rental, construction, financial services, private healthcare, education, and beauty services. – Bernama

Meanwhile, he stated that while a pro gressive wealth tax is intellectually appealing and aligned with Islamic principles such as zakat , it presents major challenges in terms of administration, enforcement and data avail ability. He explained that income and con sumption taxes are easier to manage due to the regular and traceable transactions, whereas wealth is harder to assess and value. At a separate event, Johan said SST collection is expected to increase by RM5 billion in 2025 and by RM10 billion in 2026 following the review and expansion of the tax’s scope, which will be implemented from July 1. He said the additional amount is due to the SST review aimed at broadening the national