KUALA LUMPUR: Lim Guan Eng (PH-Bagan) has urged the government to compel foreign companies operating in Malaysia to buy 50% of their essential goods from local businesses to boost the domestic economy.
The former finance minister cited the example of Indonesia and its requirement for foreign companies to source 70% of their materials locally, which he said had significantly benefited its economy.
“Some foreign investors secure contracts from private and government sectors, and some of the investors buy all their essential goods from their home country,” he said while debating the king’s speech at the Dewan Rakyat today.
Lim said that small and medium-sized enterprises (SMEs) were already struggling due to recent amendments to laws such as the reduction of working hours from 48 to 45 per week, increased maternity leave, and seven days of paternity leave for the first five children.
While these measures prioritised employee welfare, he said, they also increased operational costs for SMEs.
“SMEs are sacrificing for the sake of their employees. I suggest giving them a tax exemption of RM10,000 per year to ease their burden,” Lim added.
He said SMEs play an important role in the economy, contributing 38% of the country’s gross domestic product, providing 40% of job opportunities, and accounting for 13% of total exports.
“Any drop in SME business will have an impact on the economy,” he said.
2% EPF contributions
Lim also questioned the government’s move to make it mandatory for employers to contribute 2% to the EPF for foreign workers, which he said burdened local businesses.
He said even Singapore did not impose similar rules, with no repercussions from the International Labour Organization (ILO).
He said that US president Donald Trump had also openly gone against United Nations institutions without ramifications.
“Why must Malaysia follow international laws that harm our businesses?” he said.
On Monday, human resources minister Steven Sim said the 2% employer contribution aimed to enhance fairness in the labour market by ensuring social protection for all workers, in line with international standards such as Article 68 of the ILO Convention 102, which guarantees equal social protection rights for non-citizens.
Source: https://www.freemalaysiatoday.com/category/nation/2025/02/05/foreign-firms-should-buy-50-local-goods-to-boost-economy-says-guan-eng/