The National Tech Association of Malaysia (PIKOM) welcomes the Government’s strong commitment to digitalisation and innovation in Budget 2026, which marks an important step toward Malaysia’s ambition to become an AI-ready digital economy by 2030.
The budget reflects progress in several areas championed by PIKOM, particularly AI, SME digitalisation, and digital talent development — but also highlights the need for continued coordination and sustained collaboration to ensure policies translate into broad-based national impact.
What Malaysia Got Right
PIKOM commends the Government for embedding digital transformation as a national growth driver through:
· RM5.9 billion for research, development, commercialisation and innovation (RDCI) across ministries;
· RM20 million to strengthen the National Artificial Intelligence Office (NAIO) and RM2 billion to develop Malaysia’s Sovereign AI Cloud;
· RM53 million for the Digital Acceleration Grant to promote AI, blockchain and quantum computing adoption; and
· RM1 billion in financing and grants through DFIs to support SME automation and digitalisation
Crucially, the Government also announced a 50% additional tax deduction for SMEs on AI and cybersecurity training recognised by the MyMahir National AI Council for Industry (NAICI), jointly led by TalentCorp and MyDigital — a direct response to PIKOM’s call for incentives that strengthen cyber readiness and workforce resilience
PIKOM also recognises HRD Corp’s RM3 billion allocation for three million digital and high-tech training opportunities, aligning with its proposal for accelerated reskilling and upskilling programmes.
What Was Missed
While PIKOM welcomes these positive steps, several areas warrant closer inter-agency collaboration and long-term policy alignment:
· Cybersecurity development could be further enhanced through a more coordinated approach that complements existing training incentives with ecosystem-level safeguards.
· ME digital adoption challenges remain, particularly among micro and rural enterprises that require stronger outreach and advisory support.
· There is a need to strengthen coordination across ministries and agencies, as overlapping mandates can sometimes dilute programme effectiveness and slow policy execution.
· Greater inter-agency alignment in public procurement policies would also help create a more enabling environment for local system integrators and startups to participate in national digitalisation efforts.
To ensure coherence, PIKOM reiterates its proposal for a National Digital Council to coordinate strategy, integrate ESG principles, and align digital policies across sectors
The Road Ahead
PIKOM urges the Government to prioritise:
1. Policy clarity and consistency to ensure long-term investor confidence.
2. Outcome-based incentives that link grants and tax reliefs to productivity improvements.
3. Inclusive digital participation across SMEs, women entrepreneurs, and rural communities.
4. Cyber trust and resilience as national economic pillars.
“Budget 2026 delivers strong intent and investment in digital growth, but execution and inclusivity must now take centre stage,” said Alex Liew, Chairman of PIKOM. “Malaysia must now turn ambition into measurable impact — ensuring our businesses, people, and policies move together into the AI era.”
PIKOM stands ready to work with the Government, agencies, and private sector to translate these fiscal measures into sustainable, high-impact outcomes that will shape Malaysia’s digital future.
