Dear Prime Minister Anwar Ibrahim,
Every day, we see glowing headlines: “Malaysia secures billions in foreign investment!”
You and your team globe-trot, rolling out red carpets, offering tax holidays, pioneer status, special economic zones, and a host of incentives under frameworks like the New Investment Incentive Framework (NIIF) introduced in Budget 2025.
We support attracting foreign direct investment (FDI) if it genuinely benefits Malaysia—bringing technology, jobs, and sustainable growth.
But here’s the stark question: Why do foreign investors get the royal treatment while Malaysia’s own “children”—our small and medium enterprises (SMEs) and micro, small, and medium enterprises (MSMEs)—are treated like suspects in a perpetual audit?
SMEs are not just businesses; they are the lifeblood of our economy, employing millions and driving everyday innovation.
Yet, under your administration, they are being crushed by relentless policies that punish productivity while rewarding dependency.
This is the most business-hostile government we’ve seen, favoring endless handouts to non-productive segments (“walaun” culture) at the expense of entrepreneurs, taxpayers, and job creators who keep this country running.
The Overlooked Contributions of SMEs vs. Government Revenue Streams
In 2024, SMEs contributed RM652.4 billion to Malaysia’s GDP—39.5% of the total—and grew at 5.8%, outpacing the national economy’s 5.1% expansion. They employ over 7 million Malaysians, far more than any foreign investor’s promises.
Compare that to the government’s revenue squeezes:
- New Sales and Service Tax (SST) expansions and other taxes: Generating an extra RM5 billion annually.
- Subsidy rationalizations: Saving up to RM10 billion a year.
- PETRONAS contributions: Around RM72 billion in total (including RM32 billion in dividends), but still a fraction of SMEs’ ongoing impact.
SMEs deliver RM652.4 billion in value every year—over 30 times what the government fights to collect through these measures. Yet, what do we get in return? A barrage of costs and compliance that threatens our survival.
The Crushing Burdens on SMEs: Compliance Overload and Rising Costs
Local SMEs face an endless onslaught of regulations and hikes that erode our margins:
- 8% SST on commercial rent, paid upfront monthly—regardless of profitability.
- E-Invoicing: Rules changed four times in 18 months, forcing thousands in software, training, and accounting costs, only for businesses below RM1 million to be exempted later. No refunds, no apologies—just sunk costs.
- Electricity tariffs for commercial users up 15–20%, commercial gas prices rising, assessment rates increasing, SOCSO contributions hiked, stamp duties, insurance, and service charges all climbing—while profit margins shrink.
- Digital service tax, sugar tax, sugary drink excise, tourism sustainability fees, and departure levies that change annually.
- Foreign worker policies flip-flopping: Higher levies, mandatory EPF contributions (adding RM17.4 billion in annual costs to businesses), stamping fees, and compulsory reporting—one day late means compounds of RM10,000–50,000.
- Minimum wage increases, ESG reporting mandates, and government agency fees surging 15%–250%.
- Diesel subsidy removal, SST increases, Port Klang container handling fees up 30%, storage costs up 197%–243%, and another electricity hike looming (15% more for SMEs).
For a small business with just five workers, this translates to:
- Minimum wage hikes: +RM1,000–1,250/month.
- Foreign worker levies, stamping, and EPF: +RM8,000–12,000 per worker per cycle.
- Electricity bill increases: +RM1,000–3,000/month.
- 8% SST on rent: +RM2,000–5,000/month (even during losses).
- E-Invoicing setup and maintenance: RM5,000–20,000 initial cost + ongoing fees.
That’s an extra RM10,000–30,000 monthly for a tiny company—before the next regulation hits. Knock-on effects like rising transport and raw material costs amplify the pain. Today, the role of a “boss” is no longer business management; we’re full-time accountants, compliance officers, HR specialists, and beggars at agency counters just to survive.
Tax Refund Delays: Holding Our Money Hostage While Funding Handouts
Adding insult to injury, the Inland Revenue Board (IRB) holds overpaid tax refunds for 3–5 years. This isn’t about underpayment or evasion—it’s TERLEBIH BAYAR, money already belonging to businesses, taken in excess.
With 7 out of 10 SMEs having less than six months’ cash reserves (many under three months), these delays are deadly. By the time refunds arrive, companies are bankrupt, shuttered, and workers laid off. That “extra” tax becomes free money for the government.
If IRB is so inefficient it takes half a decade to process refunds, how can the same government swiftly disburse RM10 billion annually in civil servant salary hikes (excluding bonuses) or international aid in minutes? Even former Finance Minister Lim Guan Eng raised this in Parliament seven times, begging for action—yet it’s “depan cakap lain, belakang buat lain.”
Meanwhile, billions flow into handouts for non-productive segments, perpetuating a “walaun” culture of dependency. Politicians champion the entitled who refuse to help themselves, while punishing successful entrepreneurs.
Our corporate tax rate of 24% is among the region’s highest (vs. Singapore’s 17%), yet costs for raw materials, energy, transport, and compliance skyrocket.
When you ask, “How to lonjak ekonomi? How to create more Bumiputera entrepreneurs?”—remember, 45% of SMEs are Bumiputera-owned. Today’s Malays are usahawan, not waiting for subsidies to fall from the sky. Urban M40 Malays and entrepreneurs have no voice; we’re punished for succeeding.
Uneven Enforcement: Targeting Legitimate Businesses While Ignoring the Rest
Enforcement is a farce. Legitimate businesses—Malay, Chinese, Indian—face raids, harassment, and heavy compounds for minor infractions, like items 2 inches over a line. But illegal operations by undocumented migrants (Rohingya, Bangladeshi, Pakistani)—no licenses, fake goods, zero taxes—go unnoticed. “Hardworking” officers excel at fining legal SMEs but turn a blind eye to RM120 billion in annual civil service wastage (per Auditor-General reports).
This selective enforcement, combined with cascading blows, has SMEs screaming: “We may not survive another year.” It’s not just “Chinese businesses” suffering—that’s an outdated stereotype. Everyone is hit.
The Broader Consequences: Killing the Goose That Lays the Golden Eggs
When businesses collapse, tax revenue drops—who funds the handouts then? Struggling SMEs raise prices, fueling inflation that hurts consumers, families, and the rakyat. In the end, everybody suffers.
Yet, this government keeps squeezing: Removing subsidies, hiking tariffs, slapping fines, adding taxes and regulations, holding our overpayments. And what happens to our hard-earned taxpayer money—our sweat and blood? It’s used for international “hero” donations, outbidding others in piety, pumping billions into endless handouts, and funding pet projects like Kota Madani.
You punish job creators and reward those who refuse to work. You take from the productive and give to the entitled. Stop killing the goose that lays the golden eggs—because when it dies, the whole country starves, including those you claim to protect.
A Call for Change
Foreign investor: “Malaysia, I love your incentives!” Anwar: “Take 15 years tax-free, sayang!”
Local SME: “Abang, saya pun sayang Malaysia ni…” Anwar: “Diam. Bayar SST sewa dulu baru boleh sayang.”
Anwar: “Kita mahu jadi high-income nation!” SME: “Bagus tu bang. Tapi high-income tu untuk Google, Microsoft, sama anak YAB je ke? Kami yang lain high blood pressure nation la ni.”
You roll out red carpets for foreign investors while rolling SMEs into carpets until we suffocate. It’s time to reverse course:
- Expedite tax refunds within 30 days, with interest for delays.
- Reduce compliance burdens and fees; provide subsidies or grants for e-invoicing and ESG.
- Enforce fairly—target illegals, not legitimate businesses.
- Balance incentives: Extend tax holidays and zones to local SMEs.
- Cut corporate taxes to regional levels and redirect wastage savings to business support.
Malaysia’s SMEs are the backbone feeding families and holding this country together. Treat us as partners, not criminals. Our survival is your high-income nation’s foundation.
