KUALA LUMPUR, Oct 22 — The government has been urged to require foreign investors and external parties winning government or private tenders to source 50 per cent of their supplies from local small and medium-sized enterprises (SMEs).

National daily Berita Harian reported Bagan MP Lim Guan Eng as citing Indonesia as an example, where the requirement is even higher, mandating foreign investors to purchase 70 per cent of their supplies from local suppliers.

"I have received complaints from SMEs that most foreign investors do not buy local goods, and some even source 100 per cent of their supplies from their home country, claiming it is cheaper,” Lim was quoted as informing Parliament today.

"While I understand that it makes sense to invite chefs for foreign investors due to different culinary preferences, is it right that not a single screw is bought from SMEs?”

During the debate on the Supply Bill 2025 in the Dewan Rakyat, Guan Eng further elaborated on the challenges posed by foreign contractors who win tenders.

"These foreign contractors buy all their supplies from their home country, leaving local SMEs, who usually have business dealings, without any direct orders.

"This problem can be likened to a dragon that has suffocated many SME companies, causing many to close down,” he said.

To support SMEs, Guan Eng suggested the government increase the tax threshold based on profits applicable to the sector.

"The government could raise the tax threshold of 15 per cent for the first RM150,000 of profit to a higher value of RM300,000.

"For the 17 per cent rate for profits between RM300,000 and RM600,000, it should be raised to RM700,000. This would allow SMEs to enjoy a tax savings of RM10,000 for the assessment year 2025,” he added.