Cut red tape, let business grow’, 13MP must clear the way for private sector growth, say economists

Rafizi Ramli speaking during the engagement session at the MBSA Convention Centre, Shah Alam. - NSTP/ FAIZ ANUAR

KUALA LUMPUR: The government is planning to expedite the completion of the 13th Malaysia Plan (13MP) within just seven months, a significant reduction compared with the two-year preparation time for previous national plans.

Economy Minister Rafizi Ramli said the government is working towards presenting the draft of 13MP to Parliament by July 2025.

He said this ambitious timeline is driven by the need to ensure Malaysia's socio-economic blueprint for 2026-2030 is ready well ahead of schedule to address the nation's evolving challenges.

"We want to set a new record. In the past, preparing a Malaysia Plan would take up to two years.

13MP must clear the way for private sector growth, say economists

PETALING JAYA: The 13th Malaysia Plan (13MP) must help steer the country’s transition towards becoming a high income nation by 2030 with emphasis on greater private sector participation and less bureaucratic red tape, say economists.

Sunway University economics professor Dr Yeah Kim Leng is of the view that the 13MP must be in tune with the World Bank’s definition of a high-income nation.

“It is important to accelerate economic growth so that the income gap with other high-­income countries continues to narrow.

ALSO READ: MMA: Doctor shortage, healthcare reform must top agenda

“The plans must also include pressing ahead with the required educational, health, infrastructu­ral and environmental development that underpin a dynamic and resilient economy,” he said in an interview.

The 13MP, which is to be unveiled in Parliament on Thursday, will chart a strategic road map for the nation’s economy for the next five years.

The plan, said Dr Yeah, should also contain mechanisms and poli­cies to help Malaysia shift towards a value added tech­nology and innovation-driven economy where private sector participation is crucial.

“There is also a need for policies to increase revenue mobilisation to keep abreast of the need for higher government spending while simultaneously raising spending efficiency and service delivery effectiveness.

“This can be achieved through digitalisation and technology adoption, especially the use of artificial intelligence.”

The economic roadmap, he noted, must include the streamlining and restructuring of govern­ment linked companies and state-owned enterprises.

“This will help unlock the country’s full economic potential through stronger investment, entrepreneurship and private sector-led growth,” he added.

Economist Geoffrey Williams said the 13MP should focus on reducing the role and interference of government in existing business and commercial areas and leaving these to the private sector.

“The government should focus on areas that are the direct legitimate concern of government, including public health, education and social protection.

“Regulations should be slashed and focused only on minimum standards of health and safety, anti-corruption, good governance and anti-trust issues,” he said.

The 13MP, he added, must take into account social issues, with the creation of sustainable living income levels in the form of a Universal Basic Income and a Universal Basic Pension.

“These must support policies to raise incomes through meaningful work with a fair share of value created going to emplo­yees.

“Free higher education should be a priority through the reform of the higher education system and replacing National Higher Education Fund Corporation loans with a sustainable financial system,” said Williams.

The recent changes in the ­global economic landscape is also a factor that should be addressed under the MP13, he pointed out.

“The United States tariff issue has given us a lesson that protectionist policies come with reciprocal costs.

“So removing restrictions to market access should be a priority for 13MP,” he said.

Economist Prof Emeritus Barjoyai Bardai said over-­reliance on a purely capitalistic approach with regards to foreign direct investment has resulted in less than 200,000 companies controlling over 80% of the economy.

He said there should be a shift towards developing the nation’s micro-small and medium enterprises (MSMEs) which make up 65% of the nation’s manpower or some three-million workers.

The 13MP, he said, must also ensure the development of the nation’s semi-conductor industry, which currently ranks seventh globally.

Strategic Institute for Asia Pacific senior economic advisor Dr Anthony Dass said the 13MP must shift from the post Covid-19 recovery period to one of economic transformation to drive high-value growth, particularly in the digital and green economy.

This, he said, must be coupled by inclusive development and fiscal reform, adding that efforts must also be carried out to boost high-tech investment while accelerating upskilling and technical and vocational education and training.

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13MP must clear the way for private sector growth, say economists
PETALING JAYA: The 13th Malaysia Plan (13MP) must help steer the country’s transition towards becoming a high income nation by 2030 with emphasis on greater private sector participation and less bureaucratic red tape, say economists.

SAFEGUARDING DATA IN M’SIA’S NEW ERA OF E-INVOICING

Vast potential: Digitalisation boosts growth and efficiency, but adopting strong cybersecurity measures and secure software can protect data, systems and customers. Image: Blake Wisz / Unsplashed

AS THE roll out for Malaysia’s e-invoicing mandate draws near, small businesses around the country are embarking on their digital transformation journeys.

In doing so, they unlock numerous benefits such as increased efficiency and productivity and improved customer engagement, while becoming more competitive and resilient.

This digital shift however, can also introduce significant data and security risks.

Understanding these risks is crucial to protect businesses, their data and their customers.

Data breaches and other online crimes, including hacking and financial fraud, can have disastrous effects on businesses, such as the exposure of sensitive customer information, intellectual property theft and the disruption of business operations.

These breaches in security can result in significant losses for companies, sometimes amounting to millions of ringgit.

Additionally, small businesses, often the targets of cyber-attacks because they are seen as more vulnerable, may lose valuable consumer trust and potential opportunities.

Ahead of the phased mandate launch in August, business owners can ensure they are fully prepared by understanding the key advantages and risks of e-invoicing, and take proactive measures to safeguard their business.

Security first: Cyber threats are increasingly complex and widespread. Small businesses can protect sensitive data by choosing reputable software with strong security.

Security benefits and e-invoicing considerations

Despite the risks, the shift towards e-invoicing is certain to offer businesses numerous immediate and tangible benefits.

Enhanced efficiency, reduced errors and improved transparency in financial transactions make e-invoicing more secure than manual handling and traditional invoicing practices.

With oversight from the Malaysia Digital Economy Corporation (MDEC), e-invoicing is tracked through the Peppol framework and verified in real-time, providing an additional layer of security and accountability.

Verification through Peppol ensures that invoices are authentic, preventing fraud and alterations.

This standardised network facilitates the secure and efficient exchange of electronic documents, protecting them from cyberattacks and potential data breaches.

Choose a reputable software provider

As Malaysian businesses look to adopt solutions that will enable them to comply with the upcoming mandate, prioritising reputable software providers to ensure data, privacy and security protection cannot be overstated.

In today’s digital landscape, cyber threats are pervasive and increasingly sophisticated, targeting vulnerabilities in businesses of all sizes.

By choosing established software providers known for robust security measures, small businesses can protect sensitive customer information and internal data from breaches and theft.

Reliable software providers offer regular updates, advanced encryption and compliance with regulatory standards, ensuring that businesses remain resilient against evolving cyber threats.

Additionally, this proactive approach fosters customer trust, as clients are more likely to engage with businesses that prioritise their privacy and data security.

Xero, for example, adheres to stringent security standards and compliance requirements to effectively safeguard user data.

By incorporating multi-factor authentication (MFA), user accounts and financial data remain secure and protected while Xero’s encryption protocols prevent unauthorised data access, safeguarding it from cyber threats.

With a global presence, including in countries such as the United Kingdom, United States, Singapore, Australia and New Zealand, Xero maintains a high level of cybersecurity features and compliance measures to meet regional and international standards.

The accounting platform currently supports many local businesses in streamlining processes and improving data security.

Additional precautions

In addition to leveraging the security features of cloud accounting software like Xero, Malaysian businesses can take extra precautions to safeguard their accounting data. This includes:

> Paying attention to security notices: staying informed about security alerts and notices from software providers to promptly address emerging threats.

> Reporting unusual activity: encouraging employees to report any suspicious or unusual activity related to accounting data to prevent potential security breaches.

> Deploying antivirus and anti-malware solutions: installing reputable antivirus and anti-malware software on their devices to protect against potentially malicious software.

There is no question that digitalisation presents enormous opportunities for growth and efficiency for small businesses, but with that, come some critical security risks.

By adopting cybersecurity measures and choosing software with robust protection features, small businesses can safeguard their data, systems and customers.

Proactive security management not only protects against financial losses and reputational damage but also builds trust with customers, fostering long-term business success.

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E-invoicing system set to go

PETALING JAYA: With two days to go, most of the 5,000 companies under Phase 1 of the e-invoicing rollout are raring to go and looking at a smooth takeoff, say stakeholders.

Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong said these companies, with an annual turnover of RM100mil and above, should not face any major hiccups when transitioning to e-invoicing on Thursday.

“They will be able to cope with the transition as these companies have the resources to do so,” he said when contacted yesterday about worries some businesses have expressed about beginning the e-invoicing process.

Asked if accounting firms acting for these companies are facing pressure in switching to e-invoicing, Koong, who is a practising auditor and licensed tax agent, said that it is unlikely.

ALSO READ: How e-invoicing affects you

“There is some misunderstanding that e-invoicing is like the Goods and Services Tax (GST), which required some companies to change their entire accounting system.

This is not the case with e-invoicing because companies are already generating invoices through email and their existing computing systems. The only difference is that their invoices will now be digitised and linked to the Inland Revenue Board (LHDN),” he added.

Koong also said that it is quite normal for businesses to express worries whenever a new system is introduced, like mobile phone and QR code payments, for instance.

ALSO READ:‘There’s time for smaller companies to learn the new system’

“There would have been a lot of complaints prior to the Covid-19 pandemic (in 2020) if businesses had been asked if ewallets could be used to make payments. They were practically non-existent.

“But nowadays such payments are widely accepted even among smaller businesses and hawkers,” he said.

Experts say the pandemic greatly sped up digital payments globally, as, for a few years, people were living mostly online.

ALSO READ:LHDN announces six-month grace period for einvoicing implementation

When it comes to e-invoicing, the driving force is efficiency in collecting taxes and stopping leakages to increase the government’s tax revenue. To further ensure a smooth transition, Koong said the LHDN has announced some flexibility and relaxation of e-invoicing regulations.

For instance, there will be no prosecution action under Section 120 of the Income Tax Act 1967 for non-compliance with e-invoicing rules, provided the business complies with consolidated e-invoicing requirements.

This means the supplier can gather all statements or bills issued and then issue a consolidated einvoice as proof of the supplier’s income, according to einvoicemalaysia.my.

ALSO READ:Are you ready for e-invoicing starting Aug 1?

Koong added that the LHDN is planning to roll out an e-invoicing mobile app and e-POS (electronic point-of-sale) system by the end of this year, free of charge for businesses to download.

Phase 2 of the e-invoicing system will be implemented on Jan 1, 2025, for companies with a turnover of below RM100mil and up to RM25mil, while full implementation under Phase 3 will begin on July 1, 2025, for businesses with an annual turnover of above RM150,000.

Malay Chamber of Commerce Malaysia secretary-general Ahmad Yazid Othman said most Phase 1 companies are ready, although some may still be facing some difficulties, especially smaller businesses that serve the larger companies under the Aug 1 rollout.

He added that companies are expecting to run into teething problems just as they did when the GST was first implemented in April 2015.

ALSO READ:The e-invoicing dilemma

“The LHDN has given its assurance of some flexibility and relaxation of regulations during the initial implementation period, and this is most welcome.

“We hope that companies will not delay implementing e-invoicing with these assurances, which will at the same time motivate other companies to speed up the transition process when their turn comes,” he said.

Ahmad Yazid, who is also a senior fellow with the Malay Economic Action Council, said the experience gained from Phase 1 of the e-invoicing process will be helpful for both the LHDN and businesses to better prepare for the coming phases next year.

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How e-invoicing affects you

‘There’s time for smaller companies to learn the new system’

LHDN announces six-month grace period for einvoicing implementation

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Putting off charge for DuitNow QR payments, call for waiver for DuitNow QR payments permanent

 

New rules: PayNet said debit and credit card payments were subjected to MDR, while there is currently a MDR waiver for QR payments. — SHAARI CHEMAT/The Star© Provided by The Star Online

PETALING JAYA: Several financial institutions, including Public Bank and CIMB, have announced a waiver of the merchant discount rate (MDR) for vendors accepting payments via the DuitNow QR code platform.

CIMB has decided to postpone the MDR until the end of the year, while Public Bank will maintain the waiver until further notice. 

Public Bank has communicated on its website that it would waive the following fees for QR payment acceptance, effective from Oct 1 until further notice.

It said merchants would enjoy fee waivers for categories such as payment acceptance via Current and Savings Accounts, ewallets, and Maintenance Fee and API Integration Fee under the bank’s Enterprise Plan.

Credit card transactions under the Enterprise Plan will incur a charge of 0.25%.

The DuitNow QR service enables money transfers between banks and non-bank entities by scanning QR codes.

Related video: DuitNow QR charges won’t burden low income groups, says PM 

ALSO READ: Wee: Make waiver for DuitNow QR payments permanent

It was established by Payments Network Malaysia Sdn Bhd (PayNet) under Bank Negara’s Interoperable Credit Transfer Framework.

Earlier yesterday, Paynet confirmed that vendors would be charged a transaction fee for payments received via the DuitNow QR code platform starting Nov 1.

It said there were charges for two different epayment types – the MDR and the 50sen fee for transactions exceeding RM5,000 for peer-to-peer fund transfers between personal QR codes, not payments to merchants.

ALSO READ: Charge on DuitNow QR payments will burden SME sector, says group

Merchants, it said, would receive the payment made by their customers after deducting the MDR, which is charged based on a percentage of the transaction value.

PayNet said debit and credit card payments were subjected to MDR, while there is currently a MDR waiver for QR payments.

Starting Nov 1, the MDR waiver for DuitNow QR payments would be lifted, it said in a statement, adding that the MDR was neither a new fee nor an additional charge.

“As an incentive to promote usage during the introduction of QR payments in 2019, the MDR was waived. This was extended due to the Covid-19 pandemic.”

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