SAMENTA’s Datuk William Ng on BFM 89.9: Can Budget 2027 Pull SMEs Out of Survival Mode?

Kuala Lumpur, 9 October 2026 — SAMENTA National President Datuk William Ng went on air with BFM 89.9 on the day Budget 2027 was tabled in Parliament, setting out what small and medium enterprises need from the government — and why, for many of them, the last three years have felt nothing like a recovery.

The episode, “Budget 2027: Can It Pull SMEs Out of Survival Mode?”, aired on BFM 89.9’s Enterprise Biz Bytes with presenter Elaine Boey. Datuk Ng covered the widening gap between headline growth and business reality, the structural squeeze on traditional SMEs, the e-invoicing rollout, access to financing, the minimum wage and public procurement.

Growth on paper, pressure on the ground

Malaysia’s headline numbers look strong: the economy grew 5.2% in 2025, and 5.6% in the first half of 2026 on the official advance estimate. Datuk Ng said that is not what SMEs are living through.

“On paper, of course, that looks fantastic. But if you ask any SME, you will hear that nobody feels the excitement or the buoyancy that these numbers are supposed to represent,” he said.

What they report instead, he said, is the same complaint heard since the pandemic: margins have shrunk substantially, and rising revenue is not catching up with the rising cost of doing business. The result, he argued, is a K-shaped economy — multinationals and sectors such as semiconductors and data centres doing very well, while traditional SMEs in retail, trading, light manufacturing and construction struggle to get by.

Why traditional SMEs are “sitting ducks”

Datuk Ng pushed back on the idea that Chinese competition alone explains the squeeze, describing the problem as structural and decades in the making. Malaysian manufacturers of furniture, footwear and household plastics largely stopped operating from the early 2000s, because it was far cheaper to make those goods in China. Many SMEs adapted by sourcing Chinese products and wrapping their own brands around them.

That arrangement has now turned against them: the same suppliers are entering the Malaysian market directly.

“Our domestic supply chain is thoroughly disrupted. You don’t have any more manufacturers of these items that we used to do. So we are now sitting ducks, and there’s really nothing that we can do to compete with the Chinese players,” he said. “But at the same time, we kill our own industry way too early.”

E-invoicing: not against it, but badly built

SAMENTA was among the first business associations to call for e-invoicing to be postponed, or for micro and small traders to be exempted — a position Datuk Ng said was widely misread as resistance to paying tax.

“Our intention from day one was never to kill e-invoicing,” he said. “SAMENTA and myself, we fully support e-invoicing — not only because we think SMEs should pay the taxes correctly, but more importantly because of the digital transformation that the whole regime would drive.”

His objection was to how the system was designed and rolled out. Datuk Ng said SAMENTA had wanted the system properly developed before launch, and made as simple as scanning a QR code, the way Malaysians already pay with Touch ’n Go. Instead, he said, it produced repeated U-turns after being built on the advice of a large accounting firm he described as having no understanding of how SMEs work.

The government has since raised the e-invoicing exemption threshold from RM1 million to RM3 million in annual revenue, effective 1 September 2026 — although the exemption does not apply where the business has a corporate shareholder, holding company or related company with turnover of RM3 million or more. Businesses between RM3 million and RM5 million remain in a penalty-free transition period until 31 December 2027, with full enforcement from 1 January 2028. Datuk Ng’s assessment was blunt: “If you ask me, I think it’s a bit too little too late” — because SMEs sit inside larger supply chains and are pressed by bigger buyers to issue e-invoices regardless of the exemption, and because many of the businesses affected had already invested in preparing.

He called for regulatory impact assessments and early engagement with affected sectors before any new rule or fee is introduced. While engagement has improved at federal level, he said, it remains weak at state and municipal level, where new rules and charges still appear without notice or consultation.

Financing: the money is there, the mechanism is not

Datuk Ng was clear that Malaysia does not have a liquidity problem. Bank Negara Malaysia and the government, he said, have made sure there is money to go around, and bankers regularly approach him asking to be introduced to SMEs to lend to.

The obstacle is the credit assessment model.

“Our credit mechanisms are still stuck in the 1980s. Our banks are still evaluating SMEs like a pawn shop — where’s your factory land title, where’s your director’s personal guarantee,” he said. “Malaysia is no longer driven by manufacturing. The service sector has overtaken the manufacturing sector since the 1990s, and most players in the service sector don’t have factories — and they’re not going to have any properties to pledge as a result.”

He also pointed to the economics of small loans for bank relationship managers: the amount of work is the same whether the loan is RM5 million or RM50,000, which skews attention towards larger borrowers.

Datuk Ng credited the RM30 billion in credit guarantees channelled through SJPP under Budget 2026 — raised from RM20 billion — as the most useful measure announced for SMEs. SAMENTA pushed hard for the guarantee coverage to be lifted from 70% to 80% during the recent global energy crisis, alongside an additional RM5 billion facility, and his hope is that the 80% cap becomes permanent. At 70%, he said, an SME with no collateral to offer and no invoice to prove its case still does not get the loan, because the bank must carry the remaining risk itself.

SAMENTA’s Budget 2027 asks: export credit, dividend tax, own brands

SAMENTA has submitted 15 proposals to the government. Three were put on the table in the studio.

Zero-collateral export credit refinancing. Datuk Ng’s first priority addresses the gap between winning an export order and being paid for it — a gap, he said, that has become painfully visible during the current energy and logistics disruption, because the SME pays its supplier first and then waits months for the money. “Many SMEs have no choice but to decline large orders, because if you’re not careful, you can actually kill your business during the months when you’re waiting for the money,” he said. SAMENTA is asking the government to back a zero-collateral export credit refinancing facility that discounts a validated overseas purchase order directly, instead of demanding collateral or a director’s personal guarantee.

A review of the 2% dividend tax. Datuk Ng argues that SMEs are accidentally caught in a measure meant for larger companies and corporate investors. The tax applies to individual dividend income above RM100,000 a year that is deemed to be derived from Malaysia; foreign-sourced dividends are exempt. His concern is the incentive it creates: because SME dividends are channelled back to business owners — often their only income for the year — and most of it is reinvested into operations as working capital, he said the wider regime discourages both reinvestment and the repatriation of foreign-sourced income. “You’re discouraging people to bring money back, and to reinvest whatever profit they have into the business,” he said.

From OEM to own-brand manufacturing. SAMENTA has asked for a double tax deduction on SMEs’ operational and marketing expenditure on verified, year-on-year incremental export revenue, for companies carrying a Malaysian-registered brand. The intent is to move more SMEs from original equipment manufacturing to owning the brand and the intellectual property — which Datuk Ng says is what builds long-term equity and pricing power.

He also flagged a double tax deduction, and possibly a tax voucher, for automation and digitalisation, which he described as the measure with the most direct impact on productivity. Datuk Ng stressed that SAMENTA has never asked for blanket grants, favouring incentives that push SMEs to become more productive over outright handouts.

Minimum wage: link pay to productivity

SAMENTA has objected to further increases in the minimum wage, and instead wants wages linked to productivity, supported by government incentives. The government has been weighing a rise in the RM1,700 monthly minimum wage to RM2,000, with micro, small and medium enterprises to be given time before any new rate applies.

If the government proceeds, Datuk Ng said the impact should be moderated through tiers — urban versus rural, and large companies versus SMEs — noting that in the Klang Valley, Johor Bahru and Penang it is already hard to find local workers earning below RM2,000, while in smaller towns both the cost of living and business volumes are much lower. He cited Thailand, where minimum wages are set by province rather than nationally.

He also argued that wage decisions should be planned far ahead rather than used as a political gesture.

“We know wage increments should not be a political tool. It shouldn’t be something that you announce on Labour Day just to please the workers,” he said.

Procurement: 30% for local SMEs

SAMENTA has long called for at least 30% of government and government-linked company procurement to go to local SMEs. Datuk Ng said the actual share is far below that, with public procurement largely dominated by large conglomerates that have the volume, the economies of scale and the reach.

He stressed that the ask is not preferential treatment. “It is less about giving the SMEs the tongkat. It’s more about evening the playing field for SMEs,” he said, adding that SAMENTA wants the 30% reserved through transparent competitive bidding — which would also push SMEs that rely on government contracts to become more resilient. Today, he noted, there are rules to prioritise Malaysian products and vendors, but no set minimum for SME procurement.

What SMEs want from Budget 2027

Asked what SMEs would choose if they were given the option, Datuk Ng said most would prefer to be left alone to do business rather than receive more handouts.

“What SMEs really want are policy certainty, less bureaucracy and no unnecessary compliance burden,” he said.