Somo News
10 October 2025
2026 Malaysian Budget | Five Key Key Points for Local Businesses: Digital Transformation, Green Upgrading, and New Export Opportunities
(Kuala Lumpur, 10 October 2025) With the official announcement of the 2026 Budget (Belanjawan MADANI Keempat), the government, while continuing the spirit of “reform and give back”, is further focusing on supporting the transformation and upgrading of local enterprises. From tax incentives and financing facilities to green economy and technological innovation, it comprehensively paves the way for the growth of Malaysian SMEs in the new year.
Here are five key points that local businesses must understand:
- Strengthening of “Made in Malaysia” and local priority policies
The government has explicitly mandated that public procurement prioritize locally manufactured and innovative products, fully promoting the "Beli Barangan Buatan Malaysia" campaign. Products certified with the MySTI (Sains, Teknologi dan Inovasi Malaysia) or MyHIJAU Mark green certification will be prioritized for government procurement.
Furthermore, companies using locally sourced green technology products are eligible for a 100% Green Investment Tax Allowance (Elaun Cukai Pelaburan Aset Hijau) . This initiative aims to elevate the "Made by Malaysia" label beyond a mere label to value, boosting the competitiveness of the domestic R&D and manufacturing industries.
- RM50 billion in financing to support SMEs
The government announced that it will provide financing and guarantee lines totaling RM50 billion to fully support business operations and expansion. This includes:
- RM3 billion government guarantee (SJPP);
- RM2.5 billion for microfinance (BSN and TEKUN);
- RM1 billion Digital and Automation Transformation Fund.
This move will help local companies reduce financing costs, optimize cash flow, and guide more capital into high-growth and innovative areas.
- AI and digital transformation are at the core of corporate agendas
The government has allocated nearly RM5.9 billion in overall funding for artificial intelligence (AI), automation, and research and development innovation (RDCI) , covering the National AI Office (NAIO), AI cloud infrastructure, and AI talent training.
Small and medium-sized enterprises (SMEs) that invest in AI or cybersecurity training will receive an additional 50% tax deduction . The government also plans to develop the " Sovereign AI Cloud " and AI Transformation Centre to support domestic industrial chain upgrades and digital transformation.
- Exports and international market expansion receive systematic support
Malaysian SMEs will have a more complete export ecosystem support. The government will:
- MATRADE Export Development Fund (RM60 juta) ;
- EXIM Bank export financing (RM500 juta) ;
- The SJPP export guarantee (up to 70%) will
help promote local products into emerging markets such as Africa, the Americas, and Central Asia. The government will also consolidate the resources of its overseas economic and trade offices to enhance the visibility of "Made in Malaysia" products in the global supply chain.
- Green economy becomes the new growth axis
The National Energy Transformation (NETR) has officially entered its implementation phase, aiming for 70% renewable energy capacity by 2050. The government is also rolling out the Green Technology Financing Scheme (GTFS 5.0) , totaling RM1 billion, and implementing a carbon tax mechanism , initially covering the steel and energy sectors.
Companies that introduce energy-saving equipment, renewable energy, or circular production systems will not only receive tax exemptions but also gain an ESG advantage in future export competition.
SOMO Global Communication Summary:
Overall, the 2026 Budget is not only a policy document for stabilizing the economy but also a blueprint for promoting the digitalization, greening, and internationalization of small and medium-sized enterprises.
As Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim stated, " The Fourth Prosperous Budget is not just about numbers; it's a commitment to the future."
(Web Source: https://news.somo.com.my/somo-news/budget-2026-malaysia-sme-five-key-points/)