KUALA LUMPUR , Oct 2026. A Responsive and Inclusive Budget to Sustaining Growth and Easing Burdens
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 thatoffer 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.
