KUALA LUMPUR, Oct 14 — The Small and Medium Enterprises Association of Malaysia (Samenta) has cautioned that many SMEs are struggling with rising compliance costs despite positive economic indicators.

In a statement released today, Samenta highlighted that strong economic growth and the strengthening ringgit may give the government the impression that SMEs are performing well, but many businesses face challenges that threaten their sustainability.

"We are concerned that the government may be lulled into believing that our SMEs are doing well because of the strong economic rebound, moderation of inflation and strengthening of the ringgit,” said Datuk William Ng, Samenta’s national president.

"Contrary to that belief, many SMEs are badly impacted by the additional cost of doing business and are mulling steep increases in selling prices.”

Samenta attributed these rising costs to new compliance demands, including the upcoming e-invoicing mandate and adherence to Environmental, Social, and Governance (ESG) standards.

The association also noted that fees imposed by government agencies and local authorities have increased by between 15 to 250 per cent, further straining SMEs.

Samenta urged the government to avoid introducing new taxes and instead focus on helping SMEs manage costs, scale operations and access emerging opportunities such as artificial intelligence and energy transition.

The statement follows Samenta’s exclusion from a critical engagement session with Prime Minister Datuk Seri Anwar Ibrahim in July, which the association said limited its ability to directly present these concerns.

Samenta reiterated its commitment to supporting the government’s Ekonomi Madani agenda and expressed hope that the issues faced by SMEs will be addressed in Budget 2025.