Malaysia plans to boost economy through increased R&D

Malaysia is looking to increase investment in research and development (R&D) as it looks to emulate those developed nations that have utilised R&D to bolster their economies.

The country’s Science, Technology, and Innovation Minister, Chang Lih Kang, highlighted Malaysia’s need to catch up with other Asian countries including South Korea, Japan and Singapore when it came to R&D investments.

Speaking at the recent Mimos Technology Preview (MTP) 2024, Chang emphasised the importance of increasing R&D investments to stimulate economic growth.

The Madani Economy agenda (the government’s policy and strategy agenda) has set a target for Malaysia to achieve a gross expenditure on R&D (GERD) of 3.5% of gross domestic product (GDP) by 2030, laying the groundwork for long-term economic development.

The initiative set out seven key performance indicators as medium-term targets to be achieved within a period of 10 years.

The seven indicators are Malaysia being in the top 30 of the world’s largest economies; being in the top 12 in the Global Competitiveness Index; ensuring labour income constitutes 45% per cent of total income; helping women participation in the labour force to reach 60%; making the top 25 in the Human Development Index; making the top 25 in the Corruption Perception Index; and fiscal sustainability with a fiscal deficit of three per cent or lower.

Chang said: “Increased investments in the R&D sector can lead to higher productivity, create highly skilled jobs, and increase the country’s economic value.

“Additionally, it stimulates innovation in key sectors, namely biotechnology, renewable energy and digital technology, which will help address current challenges, such as food security and climate change.”

The minister highlighted Mimos’ pivotal role as Malaysia’s premier R&D agency in supporting the GERD target. Through strategic initiatives and collaborations with industry leaders showcased at MTP 2024, Mimos aims to propel technological advancements aligned with global energy demands.

Fostering partnerships with industry players not only drives technological progress but also facilitates the practical application of R&D outcomes for commercialization, benefiting society at large, he said.

Mimos aims to commercialize 20 R&D projects by 2025, with 15 technologies already developed during the 12th Malaysia Plan showcased at MTP 2024.

 

SMEs rail against new e-invoicing rules

The Small and Medium Enterprises Association of Malaysia (Samenta) has urged the government to exempt small traders and micro enterprises from the upcoming e-invoice regime.

“Whilst we are supportive of the implementation of e-invoicing to enhance tax compliance and curb the shadow economy, the e-invoicing initiative must not unduly disrupt business operations,” said its national president William Ng.

He added that 76.7% of all businesses are micro enterprises, with revenue under RM300,000 (£50,000) per annum. These include micro businesses with few, if any, employees.

“These businesses will be hard-pressed to issue e-invoices. Under this regime, an aunty selling char will be expected to stop frequently to issue e-invoices to customers. Even if the aunty learns how to do so, it will still disrupt the business and cause long delays to other customers. Some of these small traders may simply quit and close their businesses,” he said

Samenta suggested that any business-to-consumer enterprise with revenue under RM300,000 per year be exempted from issuing e-invoices.

Ng said the current e-invoicing process remain overly complicated. He said: “We appreciate that the Inland Revenue Board has been engaging with the industry and tax professionals to standardise the number of data fields required in e-invoices. However, the current 55 fields are far too many and will be a landmine for non-compliance.

“Given that the first batch of e-invoicing will be implemented on August 1 2024, the government still have time to step in to reduce the amount of data required. No system is fail-proof, and as such, we must balance the need for accuracy and being practical to reduce incidences of non-compliance and business disruption,” he added.