The Prime Minister’s message yesterday was clear and decisive. The MADANI Government’s current policy direction clearly signals a firm commitment to placing MSMEs at the heart of the national economic agenda. With SMEs accounting for more than half of the measures announced, the Association views this as a grounded and realistic response to the persistent operational, financial, and structural challenges faced by businesses on the ground.
As National President of the SME Association of Malaysia, the following initiatives are regarded as particularly significant and timely for the MSME community:
- The additional RM2.5 billion allocation under the SJPP, with 50% specifically set aside for SMEs that have never accessed financing, represents a significant step forward in improving credit access, particularly for first-time borrowers and smaller enterprises that have long been underserved by the formal financial system.
- The Government’s firm commitment to fully settle outstanding overpaid taxes by 2026 will deliver much-needed cash flow relief, allow businesses to plan with greater certainty, and play an important role in restoring trust and confidence in the tax administration framework.
- SST relief on rentals, including 0% SST for new MSMEs and businesses with annual revenue below RM1.5 million, and a reduced rate of 6% for others, will directly and immediately reduce operating costs at a time when businesses continue to face persistent cost pressures.
- The two-year SST exemption for the construction sector until July 2027, together with a full exemption for the construction of religious buildings, will provide stability for the industry, help safeguard jobs, and support continuity across the entire construction value chain.
- The inclusion of 10,000 new shops, small businesses and cooperatives under the RM10.1 billion Program SARA will strengthen grassroots enterprises, extend targeted support to vulnerable MSMEs, and reinforce economic participation at the community level.
- The additional RM2.4 billion allocation for small-scale infrastructure projects, benefiting G1 to G4 SME contractors, will help sustain domestic economic activity, strengthen project pipelines, and preserve employment within the local contracting sector.
Taken together, these measures provide immediate cost relief, enhance cash flow, and expand access to financing, all of which are crucial for MSMEs operating in a challenging economic climate. At the same time, they underscore the Government’s clear recognition of MSMEs as a core pillar of the national economy.
Looking ahead, the SME Association of Malaysia encourages KUSKOP to build on this strong momentum by expediting additional short-term, execution-ready initiatives, particularly in areas that directly enhance productivity and competitiveness. These include Smart Automation Grants, Digital Transformation Grants, Export Promotion Incentives and other targeted support schemes that enable MSMEs to adopt automation, digital tools, and process improvements in a practical and affordable manner. Such initiatives would help address rising labour costs, improve operational efficiency, and better position MSMEs for long-term sustainability.
At the same time, the SME Association of Malaysia respectfully advocates for structured and ongoing collaboration between the Government and recognised business associations to ensure effective implementation and maximise policy impact.
In particular, the following areas warrant attention:
- Clear, consistent and timely implementation guidelines, communicated in practical and accessible terms to minimise uncertainty and compliance challenges.
- Coordinated outreach and engagement initiatives, leveraging business associations and chambers to ensure nationwide coverage, including micro and informal enterprises.
- Joint monitoring and feedback mechanisms, enabling industry bodies to provide real-time insights on uptake, operational bottlenecks and on-the-ground challenges, allowing for responsive policy adjustments.
Business associations are well placed to connect policy decisions with real business conditions on the ground. Closer collaboration will improve transparency, strengthen implementation, and help ensure that incentives deliver real benefits. The SME Association of Malaysia stands ready to work closely with KUSKOP and relevant agencies to support outreach, implementation and monitoring efforts, and to ensure that the MADANI Government’s initiatives translate into tangible and sustainable benefits for MSMEs nationwide.
