The following commentary is contributed by ACCA’s Portfolio Head for Malaysia, Indonesia, the Philippines and Brunei Andrew Lim
As Malaysia prepares for Budget 2027, businesses need more than short-term relief. They need a policy environment that provides certainty, encourages investment and enables them to become more productive and competitive.
These priorities are interconnected, and that connection is the point. Tax certainly supports investment. Finance enables productivity improvements. Digitalisation reduces costs and opens markets. Stronger capabilities allow SMEs to participate in domestic and global supply chains. Budget 2027’s opportunity is not simply to provide more assistance, but to make support better connected and focused on measurable outcomes.
The government’s 10 focus areas provide a strong foundation, particularly through their emphasis on spending efficiency, digitalisation, workers’ welfare, home-grown entrepreneurship and outcome-based investment.
From an ACCA perspective, five areas matter most for turning that into practical change.
- Greater tax certainty and simpler compliance
For SMEs, tax policy is not simply about the headline tax rate. It is also about the predictability of rules, compliance costs and the ease of adapting to change.
Whatever is decided on the Sales and Service Tax framework, the sequencing matters as much as the substance. Businesses need the final rules confirmed at least six months before they take effect, sector-specific guidance published alongside them rather than afterwards, and a transition period in which genuine errors are corrected rather than penalised.
Smaller businesses do not have tax departments. For a company of thirty people, a rule change announced in October and effective in January is a diversion of the owner’s attention away from running the business.
- Incentives that improve productivity and finance that reaches growth-stage firms
Malaysia’s next phase of growth depends on helping businesses become more productive, not simply increasing how many businesses there are.
For SMEs, incentives should reward investments with measurable productivity gains — automation, digital systems, equipment upgrades, research and development. Outcome-based conditions are the right instinct, provided the measurement does not itself become a compliance burden.
On finance, the gap is less in availability than in readiness. Many SMEs cannot produce the financial information lenders and investors require. Budget 2027 should fund the capability as well as the capital: Support for financial planning, cash-flow management and reliable management information, delivered through professional advisers who already work with these businesses.
- Fund the advisor, not just the software
This is where the biggest return sits, and where policy most often misses. ACCA’s research on SME digitalisation found cost cited by 62% of businesses as a barrier, skills by 46% and time by 32%. Grants address the first. They do nothing for the second and third, which is why so much funded technology goes underused.
Our research also found the single most effective catalyst for digital progress in a small business is an accountant willing to lead it, rather than report on it afterwards. Not a vendor, and not a grant portal. Someone who understands the business, knows which problem is worth solving and can be held accountable for whether it worked.
Budget 2027 should make advisory fees an eligible cost under digitalisation support, alongside software and hardware. It is a small change in scheme design with a disproportionate effect on whether the investment delivers anything.
The same logic applies to AI. ACCA’s global research with CA ANZ found 72% of finance professionals have only basic or no generative AI skills. If that is the position among qualified professionals, expecting SME owners to assess AI tools unaided is unrealistic. Reliable data, sound processes and appropriate governance have to come before technology, not after it.
- Help SMEs scale and compete globally
The “Made by Malaysia” agenda is an opportunity to focus not only on supporting businesses through their early stages, but also on helping viable Malaysian companies scale.
That means growth capital, export assistance, and deliberate connections between SMEs, large companies and multinationals. Local supplier development and technology transfer conditions on major investments can ensure they generate stronger domestic spillovers.
Support should be targeted at businesses with genuine potential to diversify markets and move into higher-value activities — those building products, capabilities and intellectual property that can compete regionally, not only domestically.
- Make sustainability support proportionate
As Malaysia implements its National Sustainability Reporting Framework, SMEs will meet sustainability requirements through customers, investors, lenders and supply chains long before any regulation applies to them directly.
This is the under-recognised risk in the Budget. A Malaysian SME supplying an exporter will be asked for emissions and governance data by its customer, with no obligation on that customer to help it build the capability. Responsibility travels down the supply chain while the resources to meet it do not.
Budget 2027 should fund proportionate, accessible sustainability training and advisory services for SMEs, and give larger companies a reason (through procurement conditions or incentive design) to invest in their suppliers’ capability rather than simply demand data from them.
The same principle applies to skills. SMEs need affordable training in digitalisation, AI, cybersecurity, financial management and sustainability, but cannot release staff for lengthy programmes. Modular, employer-led training delivered with professional and industry bodies is the practical route.
What this adds up to:
- Greater certainty,
- Finance that reaches growth-stage businesses,
- Productivity support that includes the expertise to use it,
- Stronger routes to market,
- Sustainability expectations matched with capability.
None of this requires a larger budget. It requires support that is better connected and designed around how smaller businesses actually make decisions. That is what would move Malaysian SMEs from short-term resilience to sustainable growth.
