KUALA LUMPUR: The Small and Medium Enterprises Association of Malaysia (SAMENTA) has urged the government to provide tax incentives for expenses related to developing intra-ASEAN markets and supply chains in Budget 2026.
Its national president Datuk William Ng said the tax incentives would encourage small and medium enterprises to invest in regional partnerships, joint ventures, and export networks within ASEAN.
He noted that despite being Malaysia’s closest neighbours, intra-ASEAN trade remains around 21%.
Ng highlighted that recent tariff challenges and supply chain disruptions have emphasised the urgency to near-shore production and strengthen regional supply chains.
He stated this is even more crucial given the intention to move from ‘Made in Malaysia’ to ‘Made by Malaysia’.
The association president emphasised that assistance must move beyond traditional support for local manufacturing to enabling innovation, intellectual property development, and the globalisation of Malaysian brands.
Ng added that Budget 2026 should focus on cash flow relief and competitiveness rather than new revenue measures.
He warned that any form of new or expanded tax would further erode the resilience of small and medium enterprises.
SAMENTA urged the government to increase the capacity and coverage of the credit guarantee schemes so that more small and medium enterprises can obtain financing without heavy collateral requirements.
Citing the recently released SAMENTA SME Outlook Survey, Ng pointed out that while 65% of small and medium enterprises believe the economy is on the right track, many are still struggling with tight liquidity and rising costs.
He revealed that seven in ten small and medium enterprises have less than six months of cash reserves.
Ng stressed that this is not the time for new taxes or additional compliance burdens given the current economic challenges.
The association also recommended tax incentives for environmental, social, and governance adoption in Budget 2026.
These could include deductions or preferential loan rates for small and medium enterprises meeting sustainability milestones.
Ng expressed hope that the government will consider regional balancing in Budget 2026.
He emphasised ensuring small and medium enterprises in the East Coast, Sabah, and Sarawak receive equal access to infrastructure, financing, and training.
As the first budget under the 13th Malaysia Plan, Ng said Budget 2026 must help small and medium enterprises move from survival to competitiveness.
He added the budget should transform small and medium enterprises from being suppliers to becoming innovators and regional players. - Bernama
