- The Malaysian Government announced in Budget 2026 a 50% tax reduction for small and medium enterprises (SMEs) when investing in Artificial Intelligence (AI) and cybersecurity skills training, aimed at boosting productivity and competitiveness.
- The Malaysian Employers Federation (MEF), led by President Datuk Dr Syed Hussain Syed Husman, hailed this as a strategic and far-sighted measure, helping to accelerate the digital transformation of the MSME sector—the backbone of the Malaysian economy.
- He stated that the incentive helps offset training costs and encourages businesses to invest more confidently in future technology skills, especially given that small businesses often face financial and high-tech human resource limitations.
- MEF emphasized that investment in human capital development is a key factor for Malaysia to maintain its competitive position in the technology-driven global market.
- Dr Chin Chee Seong, President of the SME Association of Malaysia, said the policy will help profitable businesses leverage AI to reduce labor costs and increase operational efficiency. However, he noted that many SMEs still lack access to AI training due to their unreadiness for technology adoption.
- Meanwhile, Nivas Ragavan, President of the Kuala Lumpur – Selangor Indian Chamber of Commerce & Industry, called it a move of national strategic importance, helping SMEs enhance digital skills, data security, and productivity, preparing for Malaysia’s digital economy.
- He stressed that AI and cybersecurity have been identified by the government as two critical growth pillars, aligning with global trends of automation and innovation.
- The program will be overseen by the National MyMahir Council on AI for Industry, in coordination with TalentCorp and MyDigital, to ensure transparent and effective implementation.
📌 The 50% tax relief policy for AI and cybersecurity training marks a major step forward in Malaysia’s corporate digital transformation, helping MSMEs overcome cost and human resource barriers. When implemented in conjunction with MyMahir, TalentCorp, and MyDigital, this program promises to create a powerful impetus for Malaysia’s digital economy while building a workforce ready for the AI era.
