News & Events

[ 15-07-2013 ]
SME sector welcomes Government’s move to redefine criteria

PETALING JAYA: Small and medium enterprise (SME) sector leaders have lauded the Government’s move to redefine the SME’s criteria in terms of annual turnover and workforce.

Branding Association of Malaysia president Datuk Eric Chongapplauded the move, saying that SME classifications needed to be timely.

“The current definition is outdated and has not factored in gross domestic product (GDP) growth and inflation at the same time,” he said.

Prime Minister Datuk Seri Najib Abdul Razak was quoted byBernama as saying that the new criteria for SMEs in the manufacturing sector had been changed to companies with an annual turnover of less than RM50mil with worker numbers not exceeding 200 from the current criteria of less than RM25mil in revenue and less than 150 workers.

The value threshold for the services sector has also been raised, with SMEs being defined as firms with annual sales not exceeding RM20mil or not more than 75 workers. At present, they are defined as having less than RM5mil in annual sales or less than 50 employees.

Najib, who chaired the 14th National SME Development Councilcomprising 16 ministries and agencies at Putrajaya yesterday, also added that apart from the various programmes and funding, a National SME Advisory Panel would be formed to gather inputs and formulate strategies to create world-class Malaysian SMEs.

Adding that many companies had outgrown the existing definition, Chong said more SMEs would now be able to enjoy the incentives that the Government had to offer to help them scale up to become homegrown champions.

SMI Association of Malaysia president Teh Kee Sin also welcomed the move, saying it was long overdue.

“Malaysia began its move towards industrialisation over 30 years ago and the competitive landscape has changed immensely since then. SMEs would require greater assistance in terms of tax incentives and grants to compete in a challenging environment,” he noted.

Apart from that, under the new definition, micro enterprises have been redefined as firms with annual sales of less than RM300,000 or fewer than five workers.