Policy measures that enable private higher learning institutions (IPTS) to expand access to quality education, support human capital development, and boost Malaysia’s standing as a regional education hub are crucial for long-term financial sustainability and competitiveness, says National Association of Private Educational Institutions (Napei) deputy president Dr Teh Choon Jin.
Tax incentives for IPTS must be strengthened by simplifying and broadening access to exemptions and incentives, which currently face bureaucratic hurdles and rigid criteria, he added.
“Remove the expiry date for unutilised tax losses to recognise that education is a long-horizon investment.
“Consider lowering effective tax rates for IPTS, with conditional incentives tied to scholarships, research and development, and talent recruitment,” he suggested.
He also called for the expansion of grants and relief to support quality and innovation, including special incentives for the purchase of software, licences and teaching facilities that are becoming increasingly cost-prohibitive.
“Offer stronger support for environmental, social and governance initiatives and internship placements to improve graduate readiness,” he said.
To promote the provision of financial aid and donations, he called for double tax deductions for B40 scholarships to be extended beyond the Year of Assessment (YA) 2025.
“Increasing the tax deduction cap for scholarship and endowment contributions from 10% to at least 20-40% would also encourage greater corporate and philanthropic support,” he said.
On early childhood and K-12 private education sectors, he proposed a dedicated funding allocation to train private early childhood teachers in preparation for the rollout of the new preschool curriculum in 2026.
“Under the 13th Malaysia Plan, preschool will be made mandatory for five-year-olds, with a minimum compulsory duration of one year.
“It’s crucial that private sector teachers are adequately prepared,” he said.
With the right incentives, he added, private institutions would be able to expand scholarships for Malaysians, strengthen research output, and contribute to Malaysia’s ambition of becoming a premier global education hub.
Calling for “more decisive action and forward-thinking investment”, Vice-Chancellors’ Council for Private Universities (VCCPU) chairman Prof Mushtak Al-Atabi said Budget 2026 should set clear priorities to nurture graduates who are innovative, inclusive and resilient as the changing global economic landscape demands this.
“These qualities will influence the future of our higher education system and the nation’s ability to compete globally, ultimately defining the success of our country in the years ahead,” he said adding that one key area for growth is internationalisation.
Data from Study Malaysia and Education Malaysia Global Services shows that the nation is on track to meet the target of 250,000 international students by 2025, he asserted.
To build on this, he said, the government should introduce targeted incentives that attract more international students, particularly to private institutions.
“This will strengthen Malaysia’s global reputation and bring economic benefits,” he added.
He also stressed the need to strengthen research and innovation as it is through this type of work that Malaysia can transition to a knowledge-driven economy.
“Increased funding and stronger collaborations between academia and industry will create a dynamic research environment that fosters creativity and leadership,” he said.
Prof Mushtak also emphasised that inclusivity must be central to education, with dedicated funding and policies to support neurodiverse and disabled learners while unlocking untapped talent.
At the same time, he said, Malaysia must raise the quality and global recognition of its institutions through unified national quality frameworks aligned with international standards to boost graduate employability.
“Budget 2026 is more than numbers, it is an opportunity to invest in the country’s future.
“By focusing on these priorities, we can develop purpose-driven graduates who will shape a resilient, innovative and inclusive Malaysia,” he said.
