As the Ministry of Finance prepares to table National Budget 2027 on 9 October 2026, the Associated Chinese Chambers and Industry of Malaysia (ACCCIM) is calling for a business-friendly Budget that creates a more supportive environment for small and medium enterprises (SMEs).
ACCCIM said its expectations for Budget 2027 are centred on sustaining domestic economic growth momentum amid global uncertainty, driving investment into high-value and high-growth sectors, and implementing reforms that genuinely ease the cost of doing business.
The chamber submitted a comprehensive set of proposals to the Ministry of Finance in July, covering key issues including domestic demand resilience, business facilitation and competitiveness, as well as long-term value creation.
ACCCIM President Datuk Ng Yih Pyng said the 2027 Budget should underscore the importance of regulatory certainty, lower operational costs, improved tax structures, stronger SME competitiveness and targeted measures to support sustainable sectors such as the digital economy, renewable energy and circular economy.
The chamber has urged the Prime Minister and Minister of Finance to prioritise these areas when formulating the strategies and measures for Budget 2027.
1. A Hybrid SST-GST Framework
One of ACCCIM’s key proposals is the introduction of a hybrid SST-GST framework.
ACCCIM has strongly supported the reintroduction of the Goods and Services Tax (GST), arguing that a multi-stage GST is structurally more efficient and transparent than a single-stage Sales and Service Tax (SST).
According to the chamber, GST’s input tax credit mechanism can eliminate cascading and compounding costs while capturing broader revenue compliance.
However, with the Government maintaining that household income thresholds remain too low for a full GST reintroduction, ACCCIM said it understands the decision to refine the existing SST while exploring a targeted hybrid SST-GST framework.
While the proposed hybrid model could help remove the cascading tax effect arising from the expanded scope of SST, ACCCIM said it must simplify compliance and ease administration for SMEs.
The proposed hybrid framework should also take production and sectoral functions into account. As a starting point, ACCCIM proposed reviewing Group J of the Malaysia Service Tax Regulations 2018, which covers logistics services.
Ultimately, the chamber said any hybrid SST-GST framework must prioritise simplified administrative procedures and clear input tax credit rules to prevent compounding costs for businesses.
2. Reviewing the Stamp Act 1949
ACCCIM is also calling for a comprehensive review of the Stamp Act 1949 (Act 378), which it described as outdated and disproportionately burdensome for businesses and individual taxpayers.
Recent changes to the Stamp Act have expanded coverage to common instruments, including employment contracts. Written employment agreements, whether for professional staff such as auditors and engineers or operational workers such as security guards, require a flat RM10 stamp duty per contract.
The implementation of self-assessment for common instruments is expected to marginally increase stamp duty collection by RM300 million. However, ACCCIM said the changes have also increased upfront costs for businesses, particularly SMEs, while taxpayers face greater financial exposure for errors due to a lack of clarity surrounding the Stamp Act 1949.
The chamber has called for the old Stamp Duty Act 1949 to be repealed and replaced with new legislation that reflects current economic conditions.
In the interim, ACCCIM proposed exempting all instruments from stamp duty except for three main categories:
- Transfers of property;
- Transfers of shares, stocks or marketable securities; and
- Loan agreements.
The chamber pointed to Singapore, where stamp duty generally applies to specific documents relating to immovable property and transfers of stocks or shares, while standard service agreements, business-to-business contracts and employment contracts for professional and security services are exempt.
3. Higher Preferential Tax Relief for SMEs
With SMEs continuing to face financial pressures and rising operating costs, ACCCIM is proposing greater preferential tax relief for SMEs.
The chamber has proposed raising the preferential tax threshold to the first RM500,000 of chargeable income, taxed at 15%, from the current RM150,000 threshold.
It also proposed extending the next RM500,000 of chargeable income, up to RM1 million, to a 17% tax rate, compared with the current threshold of RM450,000.
ACCCIM also called for increased allocations for various funds, alongside reasonable borrowing costs, to provide further financial support for SMEs.
In addition, it proposed reducing the service tax rate on non-residential rental and leasing services for MSMEs from 6% to 4%.
The annual sales exemption threshold for SME tenants should also be increased from RM1.5 million to RM3 million, according to the chamber.
4. Addressing Competition from Cross-Border E-Commerce Platforms
ACCCIM also highlighted the need to mitigate the impact of cross-border e-commerce platforms on Malaysian businesses.
The chamber supports the Cabinet’s decision to strengthen regulations governing e-commerce platforms, including studying and implementing a registration mechanism designed to protect consumer interests.
ACCCIM also called for tax harmonisation to close loopholes surrounding low-value goods (LVG) and to review import thresholds for overseas factory-to-consumer goods, which it said should face the same tax burdens as locally retailed goods.
To address unfair price advantages, the chamber proposed reducing the de minimis threshold for import duty from RM500 to RM50.
It also proposed requiring high-volume online sellers exceeding a prescribed sales threshold – for example, RM1 million in annual sales – to register as a Malaysian business entity and appoint a local representative responsible for regulatory compliance and consumer protection.
Another proposal is the establishment of a central database agency to register legally registered foreign businesses operating in Malaysia, allowing their operational status to be verified and tracked.
5. Raising the E-Invoicing Exemption Threshold
ACCCIM is further calling for the Government to raise Malaysia’s e-invoicing exemption threshold from RM1 million to RM3 million in annual turnover or revenue.
The proposal is intended to allow SMEs to manage rising operational costs without the additional burden of mandatory e-invoicing compliance.
The chamber also highlighted challenges surrounding consolidated e-invoicing. Under current e-invoice guidelines, consolidated e-invoicing is not permitted once a single transaction reaches RM10,000, creating operational difficulties for businesses handling higher-value transactions.
ACCCIM proposed reviewing e-invoicing transaction thresholds by aligning cash transaction reporting thresholds with broader anti-money laundering (AML) requirements.
It suggested a threshold of RM25,000 for general transactions, while Dealers in Precious Metals and Stones (DPMS) could be given a higher threshold of RM50,000, aligned with the AML framework on customer due diligence requirements.
6. Updating the Definition of SMEs
Finally, ACCCIM is calling for Malaysia’s definition of SMEs to be reviewed and updated.
The current definition was last revised in 2013, more than a decade ago. ACCCIM said it should be updated to reflect current economic conditions and changes in business scale.
The review would also help ensure that mid-tier companies are not unintentionally excluded from SME-related incentives and support measures.
Building a More Supportive Business Environment
Across its six key focus areas, ACCCIM’s Budget 2027 proposals centre on one overarching objective: creating a more supportive and competitive environment for Malaysian businesses, particularly SMEs.
From tax reform and e-invoicing to cross-border e-commerce, regulatory certainty and the definition of SMEs, the chamber is urging the Government to ensure that the upcoming Budget addresses the practical costs and administrative challenges businesses face.
With National Budget 2027 set to be tabled on 9 October 2026, ACCCIM hopes its proposals will help shape measures that strengthen domestic demand, improve business competitiveness and encourage long-term investment in Malaysia’s economy.
