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 (SMEs) to invest in regional partnerships, joint ventures, and export networks within ASEAN.
“Despite being our closest neighbours, intra-ASEAN trade remains around 21 per cent.
“The recent tariff challenges and supply chain disruptions have highlighted the urgency to near-shore production and strengthen regional supply chains,” he said in a statement on Tuesday.
In addition, he said this is even more crucial given the intention to move from ‘Made in Malaysia’ to ‘Made by Malaysia’.
“Assistance must move beyond traditional support for local manufacturing to enabling innovation, intellectual property development, and the globalisation of Malaysian brands,” he said.
Meanwhile, Ng said Budget 2026 should focus on cash flow relief and competitiveness rather than new revenue measures, as any form of new or expanded tax would further erode the resilience of SMEs.
“We urge the government to increase the capacity and coverage of the credit guarantee schemes so that more SMEs can obtain financing without heavy collateral requirements,” he said.
Citing the recently released SAMENTA SME Outlook Survey, he pointed out that while 65 per cent of SMEs believe the economy is on the right track, many are still struggling with tight liquidity and rising costs.
“Seven in ten SMEs have less than six months of cash reserves. As such, this is not the time for new taxes or additional compliance burdens,” he said.
In addition, Ng also recommended tax incentives for environmental, social, and governance (ESG) adoption in Budget 2026, such as deductions or preferential loan rates for SMEs meeting sustainability milestones.
“We also hope the government will consider regional balancing in Budget 2026, ensuring SMEs in the East Coast, Sabah, and Sarawak receive equal access to infrastructure, financing, and training,” he said.
As the first budget under the 13th Malaysia Plan, Ng said Budget 2026 must help SMEs move from survival to competitiveness, and from being suppliers to becoming innovators and regional players.
“SAMENTA is ready to work with the government to translate Budget 2026 policies into real impact on the ground,” he added. – BERNAMA
