From Ravindran Raman Kutty

I recently met a young entrepreneur in the bustling world of logistics, where time is money and competition is fierce; the challenges he undergoes highlight the growing difficulty for those in small and medium enterprises (SMEs).

He said 2023 was one of the toughest years in his decade-long business journey. His words, full of frustration and a sense of being overlooked, highlighted the struggle SMEs like his face in an increasingly unfriendly economic environment.

Putrajaya’s recent policies have added new layers of complexity and financial pressure. Many small business owners feel caught in a system that favours the large and wealthy, leaving the little players behind.

One of the first issues the young businessman raised was the cost of diesel. As a logistics company owner, his fleet relies heavily on fuel.

“I used to pay RM2.05 per litre for diesel. Now, it’s RM3.03 as I don’t qualify for subsidies,” he said. It turns out that only those with certain types of 4×4 vehicles — such as those used by plantation owners — are eligible for the diesel subsidy.

“It’s frustrating. The big players in the industry still get diesel at RM2.05 per litre through fleet cards, while I’m paying nearly a ringgit more,” he said.

His plea for a review fell on deaf ears, despite presenting evidence such as company registration documents and tax returns, The message was clear: it was a Cabinet decision, and the officials couldn’t do anything.

It is just one example of how the government’s approach to economics is making it harder for SMEs to survive, let alone thrive.

The introduction of mandatory e-invoicing for businesses (January for large corporations and June for SMEs) requires the purchase of expensive software for compliance; it is a heavy burden on SMEs already struggling with high operational costs.

“It’s just another expense I have to absorb. The government should be making it easier for us, not harder. Earlier, it was GST, now it’s this, what will be next, I wonder? I am not against such rules, but how can I or players like me pay for such expensive systems and infrastructure?,” he said.

The most recent government move, to increase the minimum wage to RM1,700 per month, may seem like a win for employees but is another strain on businesses that already operate on thin margins.

To make matters worse, this is accompanied by higher contributions to EPF, further stretching finances for small business owners.

He expressed a deeper concern about the direction the government seems to be taking. “All they’re doing is increasing taxes and levies to get more money without understanding the real pressures we face.

“Again, the minimum wage is necessary and important, but there must be a criterion, like one’s annual turnover and an extended period of time for compliance for startups like mine,” he added.

The frustrations didn’t end there. He said he saw little benefit from the government offering tax incentives to foreign investors in places like Johor’s Forest City and the newly designated special economic zone in Gelang Patah.

He said these initiatives attract many companies from China, which don’t bring much spillover effect for local businesses, because their suppliers and vendors are based in China, unlike Japanese, European and US firms.

“We just want a level playing field. The government should stop burdening us with higher costs. If they can’t help us, at least don’t make things harder.”

SMEs across the country are struggling under the weight of these new policies, with little in relief or meaningful support coming from the government.

As he shared his story, it became evident that the government’s economic policies do not match the needs of SMEs, which form the backbone of Malaysia’s economy.

The struggles of this young entrepreneur serve as a reminder to the government that if we want to build a prosperous, inclusive economy, we must rethink our policies and start supporting the people who need it most — those in the SMEs.

Ravindran Raman Kutty is an FMT reader.

The views expressed are those of the writer and do not necessarily reflect those of FMT.