THE Small and Medium Enterprises Association of Malaysia (SAMENTA) has called on the government to introduce targeted tax incentives in Budget 2026 to support small and medium enterprises (SMEs) investing in intra-ASEAN markets and supply chains.
In a statement, SAMENTA national president Datuk William Ng said such measures would encourage SMEs to pursue regional partnerships, joint ventures, and export networks within ASEAN – a move he described as critical amid ongoing tariff uncertainties and global supply chain disruptions.
“Despite being our closest neighbours, intra-ASEAN trade remains around 21 per cent,” he said. “The recent tariff challenges and supply chain disruptions have highlighted the urgency to near-shore production and strengthen regional supply chains.”
Ng said the proposed incentives would align with Malaysia’s broader ambition to shift from ‘Made in Malaysia’ to ‘Made by Malaysia’, with emphasis on innovation, intellectual property, and brand globalisation.
“Assistance must move beyond traditional support for local manufacturing to enabling innovation, intellectual property development, and the globalisation of Malaysian brands,” he added.
SAMENTA also urged the government to avoid new or expanded taxes in the upcoming budget, warning that additional revenue measures could undermine the resilience of SMEs still grappling with cash flow constraints.
“Budget 2026 should focus on cash flow relief and competitiveness rather than new revenue measures,” said Ng. “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.”
Ng further recommended expanding credit guarantee schemes to improve financing access for SMEs without burdensome collateral requirements.
Citing findings from the SAMENTA SME Outlook Survey, he noted that while 65 per cent of SMEs remain optimistic about the direction of the economy, many continue to face rising costs and tight liquidity.
He also called for tax incentives tied to environmental, social, and governance (ESG) adoption, such as deductions or preferential financing rates for SMEs achieving sustainability benchmarks.
In terms of regional equity, Ng said Budget 2026 should ensure that SMEs in the East Coast, Sabah, and Sarawak have equal access to infrastructure, financing, and upskilling opportunities.
“Budget 2026 must help SMEs move from survival to competitiveness, and from being suppliers to becoming innovators and regional players,” he said. “SAMENTA is ready to work with the government to translate Budget 2026 policies into real impact on the ground.” - October 8, 2025
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