The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) had called for targeted tax measures to be included in the upcoming Budget 2026, including corporate income tax rebates for SMEs and a higher chargeable income threshold of RM1 million for the SME preferential 15% rate.
According to the ACCCIM, these measures can help free up resources for reinvestment in skills, productivity and innovation.
In its latest half-yearly Malaysia’s Business and Economic Conditions Survey (M-BECS) survey that covers business performance for the first half of the year (1H 2025) and expectations for 2H 2025, over half of the respondents (56.3%) agreed that ‘SMEs’ financing and capacity building’ should be the Budget 2026’s main priority.”
Tax-related measures also feature prominently, with tax credits and investment incentives (55.9%) as well as conducive tax reforms (53.1%) ranking high among areas businesses want the government to prioritise,” ACCCIM noted.
Its president Datuk Ng Yih Pyng emphasised that maintaining Malaysia’s competitive corporate income tax rate is vital to narrow the tax gap with regional peers.
“Thailand and Vietnam each has a 20% corporate tax rate, Indonesia’s current tax rate is 22% and is considering a reduction to 20%, while Singapore’s tax rate is maintained at 17%,” he pointed out.
Ng said that in making Malaysia’s tax and regulatory systems more competitive and business-friendly, the government can implement reforms that simplify compliance, reduce costs and enhance transparency to boost Malaysia’s cost competitiveness on the world stage while driving innovation and investment.
Meanwhile, AI and digital infrastructure emerged as the top priority for Budget 2026 spending and investment, as voted by 44% of respondents, thus underscoring the urgency of equipping businesses – particularly SMEs – with AI tools to remain competitive.
ACCCIM also said that stronger support mechanisms are required to address digital adoption barriers, such as skills shortages, funding gaps and limited access to technology.
The organisation suggested enhancing existing programmes such as the Digital Grant, including providing higher allocation and allowing multiple claims instead of the current one-time limit, to deliver more practical support for SMEs.
Source: https://sme.asia/budget-2026-hoped-to-have-targeted-tax-measures-boost-sme-productivity/