Last updated on October 11, 2025
KUALA LUMPUR: Malaysia’s largest Chinese business chamber has urged the government to deliver targeted tax measures in Budget 2026, arguing that reforms are essential to strengthen small and medium enterprises (SMEs) and position the economy for innovation-led growth.
The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) proposed corporate income tax rebates for SMEs and raising the income threshold for the 15% preferential tax rate to RM1 million, saying these steps would free up capital for reinvestment in skills, productivity, and technology.
Findings from ACCCIM’s half-yearly Malaysia Business and Economic Conditions Survey (M-BECS) reinforce this call. Of the 777 companies surveyed between July 10 and Aug 11, 2025, 56.3% ranked SME financing and capacity building as the top priority for Budget 2026. Tax-related measures also featured strongly, with 55.9% calling for investment incentives and credits and 53.1% seeking broader tax reforms.
Regional competitiveness at stake
ACCCIM president Datuk Ng Yih Pyng stressed that Malaysia risks falling behind regional peers unless it keeps its corporate tax regime competitive.
“Thailand and Vietnam each has a 20% corporate tax rate, Indonesia’s current rate is 22% and is considering a reduction to 20%, while Singapore’s tax rate is maintained at 17%,” he said.
Ng added that simplifying compliance, cutting regulatory costs, and improving transparency would help businesses reinvest and innovate, while narrowing the tax gap with ASEAN rivals.
Digitalisation and AI demand higher priority
Beyond tax, the survey highlights digital transformation as a pressing need. 44% of respondents identified artificial intelligence (AI) and digital infrastructure as the top investment priority for Budget 2026.
ACCCIM said stronger support mechanisms are needed to overcome barriers such as skills shortages, funding constraints, and limited tech access. It suggested enhancing existing programmes such as the Digital Grant, including higher allocations and multiple claims instead of the current one-off limit, to deliver more practical support for SMEs.
With Budget 2026 scheduled for Oct 10, 2025, expectations are rising that fiscal measures will be designed not only to stimulate short-term demand but also to future-proof Malaysia’s SME sector through innovation and digital adoption.
