KUALA LUMPUR, Feb 5 — Bagan MP Lim Guan Eng has urged the government to introduce additional tax reliefs and enforce local procurement requirements to ease economic pressures on Malaysia’s struggling middle class and small businesses.

Speaking in Parliament today, he warned that rising living costs, economic uncertainty, and global trade tensions are “pushing the M40 group and SMEs to the brink.”

Among his proposals is an additional RM10,000 tax relief for SMEs and RM5,000 for individual taxpayers, which he says will help ease financial burdens and stimulate growth.

“We need to ensure that economic gains are shared fairly, not just concentrated among the few,” he said while debating the King’s speech in the Dewan Rakyat, pointing out that while Malaysia’s foreign investments and GDP figures may look strong, many middle-class families are struggling with housing, healthcare, and education costs.

“A combination of competition from countries selling below market prices, product dumping, technological advancements, the restructuring of traditional and digital markets, and shifting trade patterns has widened the wealth gap and put increasing pressure on the middle class.

“The threat of renewed US tariffs under Donald Trump’s presidency will further strain Malaysia’s economy, exacerbating the two-tier economic divide.”

Lim highlighted Malaysia’s two-tier economy, where high-performing industries benefit from government incentives while traditional sectors are left behind.

“We cannot wait for another global economic shock to hit before taking action. Competition from low-cost producers, market shifts, and trade wars are already squeezing our middle class and SMEs. We must safeguard our industries now.”

To strengthen local businesses, Lim proposed a new requirement for foreign investors to procure at least 50 per cent of their supplies from Malaysian manufacturers.

He cited Indonesia’s 70 per cent local sourcing rule as an example of how governments can ensure foreign investments directly benefit domestic industries.

“Why can’t we implement a similar policy? Mandating at least 50 per cent local procurement would help our SMEs secure business, create jobs, and strengthen our economy.”

Another issue Lim raised was the rising operational costs for SMEs due to recent changes in employment laws.

The reduction of weekly working hours from 48 to 45, increased paternity and maternity leave, and mandatory 2 per cent EPF contributions for foreign workers have significantly raised expenses.

While he supports better worker protections, he questioned the need for employers to contribute to foreign workers’ retirement funds.

“Even Singapore does not require businesses to pay EPF for foreign workers. Why should Malaysian SMEs bear this burden?” he asked.

Lim also pointed out that other countries, including the US, have disregarded International Labour Organization (ILO) regulations when they don’t align with national interests.

“If the US prioritises its own industries over international labour policies, why shouldn’t Malaysia do the same?” he asked.

Addressing industrial concerns, Lim proposed slowing down the planned 14 per cent electricity tariff hike, suggesting it be implemented in two phases of 7 per cent instead of a sudden increase in July.

“A sudden 14 per cent tariff hike could cripple businesses. Phasing it into two 7 per cent increases would soften the blow.”

Lim further recommended delaying the luxury tax implementation to boost tourism and postponing the floating of RON95 fuel prices to prevent inflation from spiralling.

He also called for raising the SME tax exemption threshold to provide businesses with greater financial flexibility.