Strengthening Public Service Delivery: Streamline Licencing/Approvals for SMEs

By:

Janice Kwok, John Ku, David TH Tan, Jeff Wei, Adila Azhar, Ahmad Shafiee

Affiliations:

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Policy Code:

3d Anti corruption

Problem Statement:

SMEs plays an integral and substantial part in the economic development of Malaysia by occupying 97.3% of total business establishments. SMEs are undoubtedly important engines of growth for the Malaysian economy, contributing to 36.3% of the GDP and 65.5% of total employment1. However, because SMEs typically operate in an intensively competitive environment, this breeds the right conditions for the emergence of unethical practices to procure business.

Value(s) and Belief(s):

A keyway of fighting corruption includes reviewing and rescinding unnecessary regulations, simplifying the issuing of permits, doing away with unnecessary licences, and streamlining customs duties and taxes, thus reducing opportunities for bribery and extortion. Control of permit issuance is an ideal opportunity for corruption to occur. Complicated and lengthy procedures allow corrupt civil servants to demand a high price for a signature and an official stamp – and a rapidly processed application. [However, changes in rules and regulations must be introduced with care. It must not be a matter of removing important regulatory functions but of repealing regulations which are seen as superfluous, inappropriate, or ineffective].

Proposal of Solution:

A two-fold, bottom-up and top-down approach to address this issue-
a. Government agencies working with anti-corruption agencies and corporates (especially the SME sector), to review and streamline all forms of licensing, duties, and taxes imposed. Such streamlining should leverage digitalization of processes, to improve both turnaround time and reduce the opportunities for corruption to occur.
b. It should be mandatory for SMEs to provide, and implement, Business Integrity programs in their businesses and for owners and employees to have access to a whistleblower channel, so that instances of corruption can be escalated for remedial action.

Additional Information:

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