In Budget 2020, various initiatives were introduced to boost digitalization and automation in the SME sector as part of the 11th Malaysia Plan to expedite economic growth. However, the adoption rate was relatively low as they were viewed as optional to businesses at the time. After the COVID-19 pandemic hit Malaysia, the initiatives were further enhanced via the economic stimulus packages, namely the PRIHATIN and PENJANA. As a continuation of these initiatives, Budget 2021 has also proposed various incentives and assistance for SMEs. The focus is to ensure SMEs survive this crisis and be resilient throughout the economic uncertainties affecting Malaysia
With an additional RM150m allocated under the SME Digitalization Grant Scheme and the Automation Grant in Budget 2021, it is time SMEs embrace automation and digitalization in their operations.
The Government’s efforts to facilitate the digital transformation of SMEs and micro SMEs are evident in Budget 2021, with RM150m allocated for the Shop Malaysia Online initiative. Now, smaller-scale, local entrepreneurs are also able to access the country’s digital economy by having universal e-commerce platforms that will open up new opportunities not available previously in their traditional mode of operations. Acknowledging the need for workforce upskilling in the digital environment, the Government has also allocated RM100m for ICT training for Malaysians.
SMEs should recognize that automation and digitalization are no longer a differentiator and are in fact integral ingredients to a business’ survival. SMEs must work closely with their key stakeholders, such as their employees, customers, suppliers and service providers, to ensure the effectiveness of digital transformation throughout their entire supply chain.
Contributed by Bernard Yap, Partner; EY Private Tax and Financial Services Leader, Ernst & Young Tax Consultants Sdn Bhd about Malaysia’s Budget 2021 SME highlights.