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The Star
14 hours ago
- Business
- The Star
Gradual implementation less challenging on businesses, say traders
PETALING JAYA: A phased approach to the expanded Sales and Service Tax (SST) scope could help businesses transition more smoothly, say trade groups. SME Association of Malaysia president Chin Chee Seong proposed starting the rate at 2% for affected sectors. 'If possible, we hope the government reconsiders the implementation, but if it proceeds, it should be progressive. 'A direct 6% or 8% is too high and could lead to cash flow issues, forcing businesses to take bank loans,' he said in an interview yesterday. Chin called on businesses nearing the threshold to register for SST early. 'You can project your revenues. If you hit the mark, you pay; if not, you're still prepared.' He also suggested making authorities more accessible, possibly through an AI chatbot, to assist with queries. Associated Chinese Chambers of Commerce and Industry of Malaysia treasurer-general Datuk Koong Lin Loong also recommended a gradual service tax implementation, starting at 4% instead of jumping to 8%. 'A progressive approach offers a cushion for businesses to adjust,' he said. On the grace periods, Koong said it can be challenging especially for the construction sector. While non-reviewable contracts are given a 12-month grace period, he said most drafted contracts are reviewable. He called for a 36-month grace period for both reviewable and non-reviewable contracts in the construction sector due to the duration of projects and contract complexities. Federation of Malaysian Business Associations vice-chairman Nivas Ragavan said the grace period provides breathing space but compliance requirements must be made clear to avoid confusion or complacency. 'A phased implementation is more SME-friendly and allows for data-driven adjustments if inflation or consumer impact is severe,' he said. Nivas also cautioned that retrospective SST payments could force SMEs to absorb uncollected taxes, suggesting a dedicated helpline or portal to address these concerns. Putrajaya Hawkers and Small Traders Association president Juhaidi Yean Abdullah expressed concerns about consumer impacts. 'While most members haven't met the SST threshold, there is worry over price increases. 'Members would prefer not to raise prices, but the tax expansion might necessitate passing costs to consumers,' he said.
![SME group: KPDN failed to consult us on Op Gasak [WATCH]](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fimages%2Farticles%2Fgasut2_NSTfield_image_socialmedia.var_1749182422.jpg&w=3840&q=100)
![SME group: KPDN failed to consult us on Op Gasak [WATCH]](/_next/image?url=https%3A%2F%2Fassets.nst.com.my%2Fassets%2FNST-Logo%402x.png%3Fid%3Db37a17055cb1ffea01f5&w=48&q=75){kind=small}
New Straits Times
06-06-2025
- Business
- New Straits Times
SME group: KPDN failed to consult us on Op Gasak [WATCH]
KUALA LUMPUR: Small and medium enterprise (SME) associations should be involved in industry policymaking from the outset, rather than only being consulted after decisions are made. SME Association of Malaysia president Dr Chin Chee Seong cited a recent policy briefing by the Employees Provident Fund (EPF) as a positive example, where associations were invited to provide early feedback before any policy changes were finalised. "That kind of engagement is good for both sides," he told the NST's Beyond the Headlines. "We want to be involved from day one—before policies are drafted or approved—so we can help shape regulations that are fair and practical for small businesses. It becomes much harder to make changes once a policy is already in place." However, he said this level of engagement was lacking from the Domestic Trade and Cost of Living Ministry (KPDN), particularly in the context of enforcement operations such as Op Gasak. "Other ministries are more proactive. We work closely with Miti (Ministry of Investment, Trade and Industry), Matrade (Malaysia External Trade Development Corporation), the Digital Ministry, Communications Ministry—even LHDN (Inland Revenue Board) and Customs. They engage SMEs regularly, maybe because their portfolios are more business-focused," Chin said. "But with KPDN, not so much. I've even written to them requesting a meeting, but there's been no response. Maybe they feel it's not part of their KPI. But they should engage us—many of our members deal directly with consumers, and we can provide important feedback." Op Gasak, which runs from May 1 to Oct 31, aims to curb illegal activities such as gas decanting (transferring LPG from subsidised to non-subsidised cylinders), smuggling, and the misuse of subsidised LPG by medium and large-scale businesses. Under the operation, eateries, including hawker stalls, are required to use the 14kg purple-coloured commercial gas cylinders priced at RM70. On Thursday, however, the government announced that micro and small-scale food and retail businesses may continue using subsidised liquefied petroleum gas (LPG) cylinders without a Scheduled Controlled Goods Permit (PBKB) until October. Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said the exemption would remain in effect throughout the Op Gasak enforcement period and until amendments to the Control of Supplies (Amendment) Regulations 2021 are finalised. On Thursday, however, the government announced that micro and small-scale food and retail businesses may continue using subsidised liquefied petroleum gas (LPG) cylinders without a Scheduled Controlled Goods Permit (PBKB) until October. Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said the exemption would remain in effect throughout the Op Gasak enforcement period and until amendments to the Control of Supplies (Amendment) Regulations 2021 are finalised.
New Straits Times
06-06-2025
- Business
- New Straits Times
SME group: Op Gasak enforcement poorly communicated to businesses [WATCH]
KUALA LUMPUR: The Small and Medium Enterprise (SME) Association of Malaysia has raised concerns over the lack of early and clear communication regarding Op Gasak, an ongoing operation targeting misuse of subsidised liquefied petroleum gas (LPG), saying it has left many small traders confused and anxious. Its president, Dr Chin Chee Seong, said the enforcement move, which involves scrutiny of gas usage and permits, was not properly communicated to industry players, particularly micro and small enterprises. "There may have been official dissemination of information, but nothing was directly conveyed to us or to other associations that represent small businesses," he told the NST's Beyond the Headlines. Chin said the operation's name itself — Op Gasak — was vague and raised more questions than answers. "Some SMEs are unsure if this is a swift government action or a harsh crackdown. When it involves subsidies, especially for gas, it's a sensitive issue for micro enterprises. Many of them aren't even classified as SMEs officially, yet they are affected." He said small traders were confused about compliance requirements, particularly the cap on subsidised gas cylinders. "Many of them didn't even know that after using three 14kg domestic cylinders, they must switch to the commercial 50kg tank — which costs almost double at RM70, even though it's the same gas," he said. While these regulations have existed for some time, Chin said they were not widely communicated because enforcement was previously lax. "Now, with stricter enforcement under Op Gasak, many feel blindsided. Different media sources have shared conflicting information, which contradicts what the ministry announced. This inconsistency has made things worse," he added. He called on authorities to engage more closely with business associations to ensure clearer communication in future. "When we're not engaged, we're confused too — and we don't know how to advise our members. There have been too many new policies recently that were rushed without proper consultation," he said. Op Gasak, which runs from May 1 to Oct 31, aims to curb illegal activities such as decanting (transferring gas from subsidised LPG cylinders to non-subsidised ones), smuggling, and the misuse of subsidised LPG by medium and large-scale industrial sectors. Eateries, including hawker stalls, will be required to use the 14kg purple-coloured commercial gas cylinders priced at RM70. On Thursday, however, the government announced that micro and small-scale food and retail businesses may continue using subsidised liquefied petroleum gas (LPG) cylinders without a Scheduled Controlled Goods Permit (PBKB) until October. Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said the exemption would remain in effect throughout the Ops Gasak enforcement period and until amendments to the Control of Supplies (Amendment) Regulations 2021 are finalised.
New Straits Times
06-06-2025
- Business
- New Straits Times
SME group welcomes LPG permit relief but says retail slump persists [WATCH]
KUALA LUMPUR: The government's decision to exempt small traders from enforcement over the use of subsidised LPG cylinders offers some relief but does little to ease the ongoing retail slowdown, says the Small Medium Enterprise (SME) Association of Malaysia. Its president Dr Chin Chee Seong said delays in policy clarity, coupled with mounting operational costs, are putting increased pressure on already vulnerable micro and small businesses. "From day one, this exemption should have been made clear. "Why wait until the issue escalates and becomes political? The government must act faster," said Chin during an interview with NST's Beyond the Headlines. On Thursday, the Cabinet agreed that micro and small-scale food and beverage traders may continue using subsidised LPG cylinders without the need for a Scheduled Controlled Goods Permit (PBKB) until October. The exemption remains in effect throughout the ongoing Op Gasak enforcement period and until amendments to the Control of Supplies (Amendment) Regulations 2021 are finalised. While supporting the move, Dr Chin called for more structured engagement with stakeholders including associations representing hawkers, eateries, and retailers as well as the association. "They should collect proper data from the ground before deciding on such regulations. If both sides understand the rationale — how much gas is used, for example — it can reduce friction and ensure smoother policy implementation," he said. He added that poorly communicated decisions risk being politicised or misunderstood, even if they are not initially intended to target micro traders. He highlighted the challenging economic environment facing small businesses and noted that retail and consumer spending have been declining since the Chinese New Year period. This trend, he said, is expected to be reflected in upcoming reports by the Malaysia Retail Chain Association (MRCA). "At a time when consumer spending is falling and the economy is still in recovery mode, adding more cost pressures or regulatory uncertainty will only make things worse for micro and small businesses," he added. The government has said that findings from Ops Gasak, which targets the misuse of subsidised LPG by medium and large-scale industrial users, will serve as a key reference for reviewing the regulations. Domestic Trade and Cost of Living Minister Datuk Armizan Mohd Ali said a technical committee, chaired by his ministry's secretary-general, will oversee the review and ensure that amendments reflect the specific needs of micro and small-scale food and beverage traders. Dr Chin, however, noted that unless future regulatory changes are grounded in meaningful consultation with those most affected, such issues will continue to stir controversy and erode business confidence.
New Straits Times
06-06-2025
- Business
- New Straits Times
BTH: Op Gasak, LPG subsidy & SMEs demand clarity [WATCH]
KUALA LUMPUR: A nationwide crackdown on the misuse of subsidised liquefied petroleum gas (LPG) has sparked growing concern among Malaysia's small business community, as food stall operators, laundrettes, and retailers brace for rising costs and stricter enforcement. Launched on May 1, Ops Gasak — short for Operasi Gas Memasak — is an aggressive enforcement campaign by the Domestic Trade and Cost of Living Ministry, aimed at clamping down on illegal decanting, smuggling, and the misuse of household LPG in commercial and industrial settings. While micro and small-scale traders have been granted temporary relief, allowing them to continue using subsidised LPG without permits until October 31, the broader enforcement push remains firmly focused on larger-scale abuse and non-compliant industrial users. Joining Beyond the Headlines to weigh in on the implications is SME Association of Malaysia president Dr Chin Chee Seong, as the government doubles down on its pledge to ensure LPG subsidies are used appropriately and not exploited at the expense of taxpayers or honest traders. As the situation evolves, small businesses are encouraged to stay informed about regulatory changes and participate in stakeholder engagement sessions to voice their concerns and suggestions. More in the latest episode of Beyond the Headlines. Watch on NST Online's YouTube channel. This episode was recorded on Jun 5
