Sarawak businesses need policies that ease operating costs

SIBU: The government should pay greater attention to the operating environment faced by businesses and introduce policies that can reduce unnecessary costs and administrative burdens, says Associated Chinese Chamber of Commerce and Industry Sarawak’s (ACCCIS) President, Kong Chiong Ung.

He said this was important despite Malaysia recording a strong six per cent economic growth in the second quarter, as many members of the public and businesses had yet to feel a corresponding improvement in their daily lives and operations.

“People are facing a continuously rising cost of living, while businesses are burdened by the ever-increasing costs across the entire supply chain,” he said when speaking at ACCCIS 2026 Annual General Meeting at Kingwood Hotel today (Sept. 19).

The event was officiated by Deputy Premier Datuk Amar Dr Sim Kui Hian.

Kong said costs accumulated throughout the supply chain, from production and transportation to processing and warehousing, would eventually be reflected in market prices.

“Rising fuel and upstream costs, in particular, directly exacerbate the operational pressure on businesses,” he said.

He said effective economic policies should therefore look beyond consumer prices and address challenges at the supply chain and production ends.

“The government should pay more attention to the actual operating environment for businesses, simplify administrative procedures, improve the efficiency of public services, and reduce unnecessary institutional costs,” he added.

Kong said when policies created better development opportunities for businesses, companies would be in a stronger position to contribute to economic growth, which could then translate into broader social benefits and greater upward social mobility.

On tax reform, he said the government should consider not only revenue collection but also the affordability and cash-flow position of businesses.

He said the Sales and Service Tax (SST) and Goods and Services Tax (GST) were different systems and their integration could not be achieved overnight.

“Tax reform cannot only focus on tax revenue targets, but also on the affordability for businesses,” he said.

Kong stressed that clear input tax deduction and refund mechanisms were essential, as uncertainty or delays could immediately affect corporate cash flow.

“The government must ensure that the system is transparent and implemented promptly, allowing for the timely return of funds to businesses,” he said.

At the Sarawak level, he highlighted the RM1,854 annual application fee per foreign worker under the Foreign Worker Transformation Measures (FWTA), as well as transportation and logistics pressures arising from higher diesel costs.

“We are not against the policy itself, but we hope that the government can fully communicate with the business community before implementation,” he said.

Kong said businesses would rather channel their limited resources into expanding investment, improving productivity, creating jobs and promoting industrial upgrading than dealing with rising operating costs.

“Only when the government and the business community move in the same direction can the economy truly move forward,” he said.

Turning to the future development of local businesses, Kong urged companies to “leverage existing resources” to improve their competitiveness.

He said many advanced industries, including technology, modern logistics and precision manufacturing, had developed from traditional industries through gradual improvements.

“No industry is inherently advanced,” he said, adding that traditional sectors could adopt technology and new processes to improve efficiency and productivity.

He cited examples such as the catering industry adopting modern central kitchens, agriculture using intelligent irrigation and drone monitoring, and retailers expanding from physical stores into e-commerce and data management.

Kong said Sarawak’s traditional industries, including timber processing, downstream palm oil, food manufacturing, building materials, wholesale and retail, and transportation and logistics, provided a strong foundation for further industrial upgrading.

“If every company is willing to continuously improve a single aspect, introduce a new technology, optimise a process, explore a new market, or even learn a new management method, over the years, their competitiveness will naturally improve,” he said.

He also called for stronger linkages between multinational companies and local businesses when foreign investors establish operations in Sarawak.

International companies, he said, should be encouraged to involve local businesses in areas such as raw materials, components, packaging, engineering, maintenance, logistics and professional services.

“Large enterprises should support medium-sized enterprises, and medium-sized enterprises should support SMEs, gradually forming a complete industrial chain,” he said.

Kong said foreign investment should bring more than capital and factories to Sarawak, adding that its deeper value lay in creating opportunities for local companies to gain orders, technology, talent, management experience and access to international markets.

“What we need to do is transform these external forces into the driving force for the growth of local enterprises; connect individual factories into industrial chains, and gradually transform Sarawak from an investment destination into an important link in the industrial chain,” he said.

He also highlighted telecommunications fraud as a growing social concern, saying a single phone call or malicious link could destroy a family or business.

“This is no longer just a matter of individual vigilance; it is a challenge that the entire society must confront together,” he said.

Kong said SCCI had produced an anti-fraud poster to be distributed through its affiliated associations, member companies and community networks throughout Sarawak as part of its social responsibility.

He also urged businesses to embrace artificial intelligence (AI), describing it as a key component of future business competitiveness.

Following the AGM, the Sibu Chinese Chamber of Commerce will host an AI forum themed ‘How AI Will Disrupt the Future’.

Kong said businesses needed to learn how to “leverage” AI and other emerging technologies to grow faster, more steadily and further.