PETALING JAYA: Trade associations have called for a more robust business framework and a friendlier system to ease the process of doing business in their Budget 2026 wishlist.
SME Association president Chin Chee Seong said there is a need for a reduced corporate tax rate of 10% for the first RM300,000 chargeable income for qualifying small and medium enterprises (SMEs) and a corporate tax exemption on the first RM150,000 beyond 2026.
“Additional tax rebates for SMEs investing in automation, export readiness or environmental, social and governance (ESG) practices will ease scale transition challenges and improve reinvestment capacity.
ALSO RAED : ‘Invest more in healthcare, graft reforms’
“There should also be a review of extended Sales and Service Tax (SST), particularly on rental and leasing taxation, and a deferment or revision of the implementation for SMEs.
“Consideration of a lower SST rate or tiered system should be based on business size,” he said while calling for the reintroduction of the goods and services tax in a more SME-friendly framework.
To ensure successful compliance with the upcoming mandatory e-invoicing implementation, Chin proposed an SME Digital Compliance Fund of RM100mil to RM150mil to reduce transitional friction.
“We propose a significant scale-up of the Market Development Grant and Services Export Fund, targeting the onboarding of at least 20,000 export-ready SMEs with a budget allocation of RM1.5bil to RM2bil.
“A further allocation of RM500mil to RM1bil will strengthen and expand the Green Technology Financing Scheme and Low Carbon Transition Facility.
“This will empower SMEs to meet ESG expectations in global supply chains and improve long-term competitiveness.”
Industries Unite Malaysia group coordinator Datuk Irwin Cheong said Budget 2026 must manage the rising cost of living and inflation.
“The inflation impact has been significant in the rising expenses for housing, utilities and cost of goods.
“As for talent attraction and retention, Malaysia should aim to be (more) competitive on the global market, and offer fair compensation packages to attract high-potential talents and investments.
“We are lacking in this area compared to our neighbouring countries like Indonesia, Thailand and Singapore,” he said.
Malaysian Tourism Federation president Dr Sri Ganesh Michiel said the government should allocate a comprehensive tourism budget ahead of Visit Malaysia 2026.
“Malaysia plays an important role in supporting participation in domestic or international exhibitions and cultural promotion programmes, but they cannot stand alone in guaranteeing industry readiness.
“These platforms cannot succeed if players do not have the promotional materials, digital content or quality products to showcase.
“Smaller operators, such as budget hotels and local tour agents, often lack the funds to prepare effectively,” he said.
The federation also proposed the introduction of a Direct Promotion Grant for registered and licensed tourism operators to increase visibility in both domestic and international markets.
Revenue leakage can also be prevented by ensuring transparent collection of tourism tax at all airports and international entry or exit points, said Sri Ganesh.
“Ensure that all tourist contributions are fully channelled back into the tourism ecosystem.”
