SME Association of Malaysia president Michael Kang said they are still being affected by the economy which has not recovered.

“This is especially so when the government plans to see the contribution of the SMEs to the GDP grow from 38.3% to 50% by 2030,” he said.

National Chamber of Commerce and Industry of Malaysia (NCCIM) president Ter Leong Yap had called for a moratorium on the proposed increase in foreign workers’ levy until 2021 to ease the manpower costs of SMEs.

“The levies can be ploughed back into a designated industrial revolution adjustment fund that can assist companies in automation and technology adoption,” he said at the National Economic Forum yesterday.

In March, the joint committee of the home and human resources ministries announced that the multi-tier levy system for foreign workers would begin on Jan 1 next year.

The executive director of the Malaysian Employers Federation, Shamsuddin Bardan, said the moratorium proposal should be accepted by the government as many employers in the SME sector were struggling to survive.

“One of the major costs is the payment of levy for foreign workers. If there is a moratorium on a fee increase, it will give some breathing space to the SMEs,” he told FMT.

Samsuddin said another major concern was the proposed amendments to the Employment Act 1955 by the human resources ministry.

“The total additional cost arising from the amendments is estimated at RM57.3 billion per year, an increase close to 20% on the existing labour cost for employers.

“Obviously, most employers are not in a financial position to absorb the additional costs,” he said.