The SME Association of Malaysia has called on the government to roll out targeted grants and easier access to financial aid in Budget 2026, warning that rising compliance costs and digital transformation remain pressing challenges for small and medium enterprises (SMEs).
President Chin Chee Seong said the most urgent need is support for SMEs adopting the government’s mandatory e-invoicing system, which, despite being presented as cost-free, will inevitably involve additional expenses.
“If they come up with a grant that can provide at least initial assistance for SMEs to kick-start their e-invoicing initiative, it would be very helpful. The process should be quick and simple to benefit the majority of SMEs,” Chin said.
He also urged the government to double the current digital transformation grant, which provides up to RM5,000 on a matching basis. Rising costs mean that a larger allocation of RM10,000 to RM20,000 per SME is necessary to drive the adoption of new systems and technologies.
On accessibility and effectiveness, Chin pressed for the creation of a one-stop centre for all government aid, saying scattered information and lengthy qualification processes discourage SMEs from applying.
“Clear timelines such as approval within two weeks and eligibility confirmation within a week would improve trust and speed up disbursement,” he added.
Looking ahead to the upcoming Budget 2026 announcement on Oct 10, Chin outlined a wishlist that includes:
- Reducing cost pressures, especially by reviewing the extended 8% SST on rental and leasing, which he said adds to the cost of doing business.
- Boosting infrastructure spending to strengthen the SME ecosystem and support inflows of foreign direct investment (FDI), with conditions to ensure local participation.
- Talent upskilling and retention programmes to help workers move into higher-income jobs.
- Low-cost, short-term financing at interest rates of 2%-3% between 12 and 24 months to ease SME cashflow strains.
“At the same time, Budget 2026 should not introduce new taxes or increase business costs. Instead, it must focus on reducing operating burdens, facilitating digitalisation and ensuring SMEs remain competitive in the evolving economy,” Chin stressed.
