PETALING JAYA: The 50% tax deduction for small and medium enterprises (SMEs) to undergo training in artificial intelligence (AI) and cybersecurity will help smaller firms improve their productivity.
Malaysian Employers Federation (MEF) president Datuk Dr Syed Hussain Syed Husman (pic) said the initiative announced under Budget 2026 will accelerate the digital transformation of micro, small and medium enterprises (MSMEs).
“This is a forward-looking and strategic measure that will accelerate the digital transformation of MSMEs, the backbone of Malaysia’s economy. By incentivising investment in AI and cybersecurity skills, the initiative will enhance workforce capabilities, strengthen business resilience and improve overall productivity and competitiveness.
“In the fast-evolving digital economy, employers, particularly MSMEs, often face financial and resource challenges in upgrading employee skills in advanced technologies.
“This targeted tax incentive helps offset training costs and encourages MSMEs to invest more confidently in future-ready skills development aligned with Malaysia’s digital economy agenda,” he said.
Syed Hussain commended the government for recognising the critical role of human capital development in driving innovation and ensuring that Malaysia remains competitive in a technology-driven global market.
SME Association of Malaysia president Dr Chin Chee Seong said the tax relief measure will help profitable businesses and firms that have adopted AI, which can use it to reduce labour costs and increase efficiency.
However, he acknowledged that many SMEs lack the opportunity to engage in AI training, as they have yet to embrace these technologies.
As far as cybersecurity is concerned, he said SMEs have some form of cloud service in place.
“In my view, this is a positive development. However, it is crucial to determine how many companies are currently using this tax reduction for AI and cybersecurity training.
“This information will help us understand the types of businesses involved, their respective industries, and how they can take advantage of AI and cybersecurity,” he said.
Kuala Lumpur and Selangor Indian Chamber of Commerce and Industry president Nivas Ragavan said this is a forward-looking and strategic initiative that will prepare Malaysian SMEs for the digital economy.
“Many SMEs are aware of AI and digital tools but lack the resources to invest in skills training.
“This incentive directly lowers the barrier to digital transformation and helps SMEs upskill their workforce, improve productivity, enhance data protection and remain competitive in an increasingly tech-driven market.
“The government’s recognition of AI and cybersecurity as key growth pillars shows vision and alignment with global trends toward automation, digitalisation and innovation,” he said.
SMEs will receive a 50% tax deduction for training in AI and cybersecurity, and this initiative will be recognised by the MyMahir National AI Council for Industry, which is jointly led by Talentcorp and MyDigital.
Source: https://www.thestar.com.my/news/nation/2025/10/13/sme-leaders-hail-50-tax-cut-for-ai-training