A Responsive and Inclusive Budget to Sustaining Growth and Easing Burdens
9th October 2026 – The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) welcome the National Budget 2027, applauding it as a responsive, balanced and inclusive Budget tailored to secure domestic resilience against global economic uncertainty.
The Budget 2027 balances short-term economic buffering with measures and initiatives focusing on sustaining domestic drivers of consumption and investment growth, while advancing medium- and long-term strategies to strengthen structural competitiveness, accelerate digitalization and AI transformation, and foster sustainable economic growth.
The Budget’s measures to ease rising cost of living pressures to support the low-and middle-income households and ease financial burden of local SMEs come at a vital time. Rising operating costs and foreign competition remain the biggest challenge for SMEs.
ACCCIM has been putting significant effort into bringing to the Government’s attention the persistent operational and regulatory bottlenecks that continue to impact business efficiency, increase compliance costs, and hinder business growth. Additionally, domestic MSMEs are being impacted by the influx of foreign businesses as well as global e-commerce platforms.
President of ACCCIM Datuk Ng Yih Pyng is grateful that some of ACCCIM’s recommendations and expectations have been met. Amongst these include to raise net disposable income of M40 households, lower the preferential tax rate for SMEs, the extension of tax incentives (such as Green Investment Tax Allowance; Accelerated Capital Allowance (ACA) on capital expenditure for plant, machinery and ICT equipment; and tax incentives for qualifying incentive travel, international conferences and trade exhibitions) to YA2030.
The biggest relief to businesses is no new taxes, allowing them to plan investments and manage costs without regulatory surprises.
Notably, the Budget proposed to reduce the preferential tax rate to 14% from 15% on the first RM150,000 chargeable income for SMEs, and 16% for the chargeable income between RM150,000 and RM600,000. This will benefit 300,000 SMEs with savings up to RM6,000, allowing them to retain more capital for mitigating rising operational costs and improving immediate cash flow.
Datuk Ng said that prioritizing MSMEs empowerment through targeted funding, government loan guarantees under SJPP and CGC (up to RM32 billion in 2027), and loan facilities, including micro financing as well as tax incentives (such as Accelerated Capital Allowance, review Reinvestment Allowance eligibility and incentives design) are a highly strategic approach to lower the heavy upfront capital to adopt automation, digitalization and AI. In total, the Budget has provided a sum of RM57 billion financing facilities and loan guarantees.
With heavy competition from foreign companies entering the local market, Datuk Ng encourages its members to apply for government funds to strengthen their internal capacity, modernize operations and improve competitiveness to protect their market share from rising foreign competition.
Hence, ACCCIM stresses that the application process for funding must be streamlined, transparent, and easy to access to ensure that SMEs can benefit without heavy bureaucratic delays.
ACCCIM views the proposed increase of 17.6% in the monthly minimum wage to RM2,000 from RM1,700 starting June 2027 reasonable, with an exemption given to SMEs having turnover of less than RM50 million. This will benefit 1.3 million MSMEs, or 96.2% of total enterprises.
The increase in minimum wage is also expected to benefit 4 million workers, of which about 1.8 million local workers earn below the new threshold, helping to ease cost-of-living pressures and support household purchasing power, and spur domestic demand.
To ease the operating cost of businesses hiring foreign workers, we hope the Government can consider to increase the allowable deduction for foreign workers’ accommodation expenses under Act 446 to RM250 from RM150.
Nevertheless, ACCCIM expresses concern over the wage differential between SMEs and larger enterprises may cause job seekers gravitate toward larger corporations that offer higher minimum wage rate and compensation, making hiring and retention extremely difficult for smaller business operators.
ACCCIM has reservation on the proposed minimum monthly wage of RM2,500 for semi-skilled workers and graduates as this may complicate the benchmarking of salary (market determination) based on skills and productivity. Interfering the wage determination market mechanism will distort the wage structure and cause inefficiency. Businesses and foreign investors have to deal with many regulations pertaining to the terms and conditions of employment.
Considering the concerns of the impact of foreign businesses, including foreign-operated cross-border e-commerce platforms on domestic businesses, ACCCIM welcome the Government’s commitment to review the regulatory measures and enforcement, including the tabling of E-Commerce Bill in the upcoming Parliament sitting to strengthen platform accountability. ACCCIM has submitted a detailed proposals, focusing on updating tax structures, adjusting customs and regulatory procedures, and strengthening digital trade frameworks.
Moving forward, ACCCIM stands ready to collaborate with the government, relevant ministries, and agencies to ensure the smooth implementation of Budget 2027 initiatives, fostering a highly competitive, inclusive, and resilient economy for all Malaysians.
