Kuala Lumpur:Loan facilities and financing guarantees for micro, small, and medium enterprises (MSMEs) in Malaysia are set to rise to RM57 billion by 2027, up from the current RM50 billion, as announced by Prime Minister Datuk Seri Anwar Ibrahim.

According to BERNAMA News Agency, Anwar, who also serves as the Finance Minister, revealed that the government plans to decrease the income tax rate for MSMEs by one percentage point. Specifically, the tax rate on the first RM150,000 of chargeable income will be reduced to 14 percent, while the rate for income between RM150,000 and RM600,000 will be lowered to 16 percent, potentially increasing MSMEs' income by up to RM6,000.

The government also intends to raise the value threshold for small assets eligible for capital allowances to RM3,000. For companies other than MSMEs, the overall claim limit will be increased to RM30,000. Additionally, manufacturers can reclaim sales tax on machinery, spare parts, and equipment purchased from local traders or distributors. This includes raw materials used in the production of pharmaceutical products, animal feed, fertilizers, and pesticides.

To enhance local companies' productivity, the accelerated capital allowance for expenditure on local plant and machinery, as well as ICT equipment and software, will be extended until December 31, 2030. To support MSMEs' cash flow through banks' credit facilities to mid-tier companies, agreements using excess credit between January 1, 2027, and December 31, 2030, will attract a stamp duty of only RM10. Similarly, loan agreements made through peer-to-peer financing platforms during this period will also incur a stamp duty of only RM10.

Furthermore, there will be a full stamp duty exemption for opening savings and current accounts starting January 1, 2027.