Ministry commits to enhancing awareness, understanding of cooperatives

12 October 2023

By AVV

BANGGI: The Ministry of Entrepreneur Development and Cooperatives (MEDAC) is committed to increasing awareness, understanding, and appreciation of cooperatives among the public through the Community Cooperatives Programme.

Its Minister Datuk Ewon Benedick said as of December 31, 2022, a total of 15,315 cooperatives have been registered with a membership of 7.31 million people, accumulated shares amounting to RM16.98 billion, and accumulated assets totaling RM159.61 billion.

Speaking during the launch of Malaysia Cooperative Policy 2030 (DaKoM 2030) here today, he said despite these achievements, cooperative economic activities have faced several constraints due to legislative restrictions at the national level, which limit cooperative participation in high-growth economic activities.

According to him, there are several legislations controlled by the Ministry and Government agencies that are not cooperative-friendly or restrict cooperative businesses.

“Examples include legislations involving tourism agencies, private healthcare and care services, as well as private higher education institutions. Therefore, I request on behalf of the cooperative movement for the Ministry to have the authority to oversee and regulate such legislation, which will help recognise cooperatives as business entities allowed to operate like any other business,” he said adding that he hopes the Government will consider providing special considerations to assist this cooperative movement.

He also expressed his hopes that the cooperative movement be eligible for tax incentives enjoyed by companies, such as pioneer status incentives and group relief tax incentives.

He acknowledges the difficulties faced by cooperatives in recovering post-Covid-19 and to assist cooperatives in rebuilding more progressively, the Ministry, through the Cooperative Development Council (CDC), has agreed to reduce the contribution rate to the Statutory Reserve Fund (SRF) from 15% (mandatory contribution) to 13% starting from the financial year ending December 31, 2023, until November 30, 2025.

“This means that cooperatives can increase their potential usable income for business activities with approximately RM20 million in additional cash flow. The rate will gradually return to the original rate according to CDC regulations. It is hoped that this reduction in the SRF contribution rate will provide relief to cooperatives, enabling them to recover, restore their businesses, and experience better growth,” he said.

On participation from youth he said the involvement of youth and low-income groups in cooperatives is relatively low due to a lack of interest and the perception that cooperatives are not their primary economic activity.

“To encourage the participation of these groups, the Ministry has proposed to the Government, through the Economy Ministry, to expand the People's Income Initiative (IPR) program to include cooperative movements. Special incentives will be provided to youth groups, the B40 (bottom 40% income group), and vulnerable groups to generate income through various cooperative economic activities such as the agro-food sector, services (tourism, kiosks, laundry, maintenance), among many others,” he said.

“I would like to inform the Ministry has initiated inter-ministerial collaboration with the Ministry of Housing and Local Government (KPKT) to assist cooperatives in opening more retail stores (Coopmart) in every People's Housing Project (PPR). The aim is to enable PPR residents to enjoy direct savings on kitchen essentials by purchasing them from cooperatives. Therefore, the Ministry hopes that KPKT will provide more commercial space for Coopmart cooperatives in each People's Housing Project.”