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THE MADANI Government has unveiled a comprehensive support package worth more than RM15 billion to strengthen micro, small and medium enterprises (MSMEs) as businesses navigate geopolitical uncertainty, rising operating costs and a rapidly changing global economic landscape.
Prime Minister Datuk Seri Anwar Ibrahim said the government continued to closely monitor global developments and their impact on Malaysia’s economy, particularly on small traders and MSMEs operators, which remain a crucial foundation of national economic activity.
He said government interventions were focused on three key priorities — improving access to financing, reducing business costs and enhancing the competitiveness of MSMEs.
"For MSMEs entrepreneurs, the government has taken several measures to ensure business continuity, particularly by increasing access to financing, reducing operating costs and strengthening competitiveness," he said in a parliamentary reply.
To expand financing access, the government has made available more than RM15 billion in loans and financing guarantees, particularly to support working capital requirements among MSMEs affected by external economic disruptions, including the Middle East crisis.
Since its introduction in mid-May 2026, Bank Negara Malaysia’s Stability Assistance Facility (SRF) has approved nearly RM1 billion in financing, benefiting more than 1,500 MSMEs.
The Business Financing Guarantee Scheme (SJPP) also approved financing guarantees worth RM4.9 billion in the first half of 2026, benefiting more than 6,000 MSMEs.
Meanwhile, microcredit financing provided through agencies including Bank Simpanan Nasional (BSN), Agrobank and TEKUN Nasional reached RM2.2 billion, supporting around 195,000 micro-entrepreneurs.
The government has also introduced measures aimed at lowering operating costs, particularly rental expenses for business premises managed by public agencies.
Kuala Lumpur City Hall (DBKL) has provided a 50 per cent rental reduction for hawker sites from 1 April 2026, while MARA has introduced a 20 per cent rental discount for its business premises effective from 1 June 2026.
On digital tax reforms, the government said e-Invois implementation had helped strengthen tax compliance and reduce revenue leakage.
The initiative has resulted in more than 50,000 taxpayers submitting additional tax declarations amounting to RM1 billion.
However, the government acknowledged concerns among businesses over compliance costs and said it would continue assessing measures to ensure the transition does not place excessive pressure on MSMEs.
In December 2025, the government increased the income threshold for e-Invois exemption from RM500,000 to RM1 million, benefiting more than one million taxpayers.
The transition period was later extended in April 2026 until 31 December 2027 for taxpayers with annual income of up to RM5 million.
As an additional measure to ease compliance burdens, the government plans to introduce a voluntary e-Invois disclosure programme until 31 December 2027.
Under the programme, taxpayers will be allowed to review, update and correct e-Invois transactions submitted or required to be submitted from the date of mandatory implementation until the end of the programme without facing penalties from the Inland Revenue Board (LHDN).
The government will also accelerate tax incentives for businesses that fully comply with e-Invois requirements by allowing full capital allowance claims within one year for eligible expenses.
These include investments in information and communication technology (ICT) equipment, as well as the development or upgrading of computer software required for e-Invois implementation.
The government has also introduced measures to cushion the impact of diesel subsidy reforms on small businesses.
Individual owners of pickup trucks and sport utility vehicles (SUVs) may apply for an additional 100 litres under the BUDI Diesel allocation, raising their total entitlement to up to 300 litres.
As of 6 July 2026, around 200,000 Malaysians had been approved for the additional 100-litre allocation.
The Domestic Trade and Cost of Living Ministry (KPDN) has also expanded the SKDS fleet card facility to include pickup trucks and SUVs owned by small businesses, particularly sole proprietors and partnership operators.
To strengthen MSME competitiveness, the government has introduced digitalisation support measures, including SME Digitalisation Grants of up to RM5,000 to encourage businesses to adopt digital technologies and artificial intelligence (AI) solutions.
Authorities have also stepped-up integrated enforcement against illegal businesses operated by foreign nationals who fail to comply with licensing requirements and regulations.
Anwar said the measures reflected the government’s continued commitment to ensuring MSMEs remain resilient, competitive and prepared to face a more challenging global economic environment. - July 7, 2026
