03/10/2025

BIZ & FINANCE FRIDAY | OCT 3, 2025

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BUDGET 2026 WISH LIST

Focus on targeted financial assistance for SMEs: Expert

Proposal to set up National Digital Council to drive ESG, investments KUALA LUMPUR: The National Tech Association of Malaysia (Pikom) has called on the government to establish a National Digital Council under Budget 2026 to integrate environ mental, social and governance (ESG) principles and maintain Malaysia’s attractiveness to investors. Chairman Alex Liew said clear policies are crucial for digital industry growth. He said Malaysia has successfully attracted data centre investments thanks to favourable conditions such as land availability and infrastructure. However, recent tariff revisions, the expansion of the Sales and Service Tax (SST), and Universal Service Provision Fund requirements have raised concerns among investors. “Consistency is key, and without a clear and predictable investment climate, Malaysia risks losing oppor tunities to neighbouring countries competing aggressively for the same capital. Hence, Budget 2026 should send a strong signal of stability and investor-friendliness to sustain momentum in this critical sector,” he told Bernama. Meanwhile, Pikom has recom mended enhanced digitalisation grants – RM10,000 for micro, small and medium enterprises and up to RM50,000 for digital marketing adoption, tied to measurable out comes. Liew noted that SMEs make up over 97% of Malaysia’s businesses, yet many, especially micro enterprises, struggle with digital adoption, and without intervention, these firms risk being left behind, weakening the wider economy. “Support must also extend to women entrepreneurs and mar ginalised groups. By digitalising the backbone of the economy, Malaysia can boost productivity, widen its tax base, and foster inclusive national growth,” he said. On taxation, Pikom proposed that Budget 2026 include double tax deductions for digital training, expanded upskilling and reskilling initiatives, and closer alignment between education curricula and industry demand. At the same time, Liew said talent retention requires reviewing salary structures and career pathways. “A competitive, future-ready work force is the cornerstone of Malaysia’s innovation-driven economy. “In addition, we advocate that every Malaysian be provided with an annual training credit for upskilling,” he said. Pikom also urged the government to allocate funds for non-government organisation-led digital safety cam paigns, broaden school-based aware ness programmes, and provide incentives for companies to establish Security Operating Centres. “A secure digital ecosystem would not only protect Malaysians but also attract investors seeking stability and resilience,” he added.

very different from those faced by government-linked companies, multi national corporations and public-listed companies,” Yap said. When asked about how SMEs leverage artificial intelligence (AI) and digital technologies to improve their operations, Yap said SMEs can utilise AI and digital technologies to streamline operations, enhance customer engagement, and improve decision-making, which will free up the time of business owners and employees to focus on innovation and expansion. “However, they need support in terms of access to affordable tech nology solutions and training pro grammes. “Government initiatives that promote digital literacy and provide funding for technology adoption and training will be crucial in enabling SMEs to thrive in a digital economy,” said Yap. He added that an SME’s journey to embrace AI and digital technology will differ from that of mature markets and industries, so understanding the type of support that SMEs need and educating them about the benefits will be crucial. “We have seen SMES naturally adopting e-wallets and online trading during the era of Covid-19 due to challenging operational and business environments, so there is certainly precedents of SMEs embracing tech nology,” Yap said. The outlook for SMEs in Malaysia is cautiously optimistic, he said. With the right support from the government and a focus on inno-vation, SMEs can improve their competitiveness and adapt to changing market conditions. “The 13th Malaysia Plan emphasises the importance of digital transformation, which presents an opportunity for SMEs to innovate and grow. Talent employ ment will be the biggest contribution from the SMEs, and as such, the continuous learning and reskilling of the SME workforce must not be neglected,” Yap said.

o Further tax incentives for small and medium businesses that invest in technology and innovation can help them win market share, says EY Malaysia partner

Ű BY JOHN GILBERT usnbiz@thesundaily.com

many still face challenges due to limited resources and knowledge. “SMEs can collaborate with industry associations to gain valuable insights and support in navigating tariff-related challenges. “To reduce the effects of tariffs, SMEs can adopt strategies such as diversifying their supply chains, exploring new markets and investing in technology to improve efficiency,” Yap said. He noted that the introduction of e-invoicing presents both oppor tunities and challenges for SMEs as many may struggle with the initial setup costs and the need for digital literacy. To transition effectively, SMEs should invest in training their staff and consider partnering with technology providers who can offer affordable solutions. “The government can play a role by providing incentives for SMEs to adopt e-invoicing systems and has already offered certain tax benefits to support these efforts.” From an opportunity standpoint, he added, embracing e-invoicing would enable SMEs to accelerate their overall digitalisation agenda and help enhance the use of technology in the management and administration of their businesses. “Furthermore, the vocational education sector should start in cluding technology literacy in their curriculums to equip the new entrants into the workforce with the necessary knowledge to handle an ever-changing working environ ment,” Yap said. Moving on, Yap said the Ministry Budget 2026 announcement on Oct 10, Airbnb has outlined several policy recommendations for the govern ment’s consideration, including: 0 Introduction of targeted pro grammes to help Malaysians leverage digital platforms to supplement household income, expand local entrepreneurship and encourage homeownership in line with national housing priorities to ensure that the benefits of VM2026 and tourism growth are shared widely. 0 Allocate funding for destination marketing, digital infrastructure upgrades and local community tour ism initiatives; encourage provisions that ensure a level playing field, pro mote innovation and strengthen con sumer protection. A forward-looking approach will

KUALA LUMPUR: The government should focus on providing targeted financial assistance, such as grants and low-interest loans, specifically for small and medium enterprises in Budget 2026. Additionally, further tax in centives for SMEs that invest in technology and innovation can help them win their fair share of the market. Ernst & Young Tax Consultants Sdn Bhd Malaysia private tax leader and partner Bernard Yap said creating a supportive regulatory environment that reduces bureau cratic hurdles will also be essential for SME growth. In addition, the government can consider special deductions for employers to invest in providing additional training or reskilling their employees to be proficient in the latest technological solutions. Yap said SMEs are the backbone of Malaysia’s economy, contri buting approximately 38% to the gross domestic product (GDP) and employing around 47.8% of the workforce. The sector plays a crucial role in driving innovation, creating jobs and fostering economic growth. The diversity within the SME sector, spanning manufacturing and services, enables them to adapt to changing market demands and make significant contributions to the overall economic landscape. “While some SMEs have begun preparing for the impact of tariffs, PETALING JAYA: Airbnb commends the Malaysian government for its steadfast commitment to long-term economic growth and resilience, which are essential foundations for the development of the tourism industry. These proactive efforts will play a key role in supporting the objectives of Visit Malaysia 2026 (VM2026) and the 13th Malaysia Plan, helping to transform the tourism sector into a high-income, sustainable and globally competitive industry by 2030. Looking ahead, Airbnb Asia-Pacific public policy director Mich Goh ( pic ) said they believe that the sharing economy can play a crucial role in extending the benefits of tourism to more communities. In this context, and ahead of the

enhance industry competitiveness and reinforce Malaysia’s position as a leading tourism hub. 0 Fair, progressive guidelines that are not restrictive to hosts and local authorities, while providing clarity for the short-term rental accommodation industry and unlocking greater eco nomic opportunities for Malaysians. Goh said Airbnb stands ready to work closely with the government and industry stakeholders to support and implement solutions that foster a strong and cohesive tourism eco system. “We look forward to the tabling of Budget 2026, with the hope that Airbnb and our host community can continue contributing to the travel sector and broader economic growth,” she added. of Finance and the Inland Revenue Board should continue to develop policies that recognise the unique challenges faced by SMEs, parti cularly in terms of compliance costs and access to financing. This could include simplified tax filing processes, tailored tax incentives and dedicated support programmes that align with the objectives of the 13th Malaysia Plan, which emphasises sustainability, resilience and shared prosperity. “The authorities should ensure that representatives from SMEs are invited to participate in discussions and focus groups on proposed economic policies, as regulators need to understand the specific issues or pain points faced by SMEs, which are Yap says creating a supportive regulatory environment that reduces bureaucratic hurdles will also be essential for SME growth.

Airbnb hopes for policies that will extend benefits of tourism to more communities