Gerakan hopes the government will give SMEs more assistance and incentives in Budget 2011 in order for the sector to compete on a stronger footing in the global market.

Gerakan vice-president Datuk Mah Siew Keong said since SMEs made up of more than 90% of all businesses in the country, they should be the key to ensure that the New Economic Model (NEM)’s objectives are met.

He said an important step to spur the growth of SMEs was also to reduce the tax rate.

To help smaller enterprises grow quicker and to assist SMEs in their cash flow, Gerakan proposes that the first RM500,000 of chargeable income be reduced to 10%.

“Some countries have special tax rates for SMEs and so a 10% tax rate will be a big incentive to spur our SMEs to greater heights,” he said.

Datuk Mah, who is also the party’s head of central economic bureau, also urged the government to provide grants and incentives to further encourage players of SMEs to upgrade their knowledge and technical expertise.

“The grants and incentives will enable SMEs to take part aggressively in marketing, accounting, branding and IT seminars and courses,” he said in a statement.

Mah said Malaysia should not compete solely on low price and low cost with countries such as Vietnam, Cambodia and Indonesia who have cheaper labour cost. We must compete on quality, branding and innovation.

“Gerakan hopes that Budget 2011 will guide SMEs towards the direction of high quality, innovative and competitiveness.”