Putrajaya: According to Economy Minister Datuk Seri Rafizi Ramli, a significant simplification of the country’s research and development (R&D) tax incentives, along with reform of the grant system, will be included in the 13th Malaysia Plan (13MP).
He said the changes are intended to address long-standing concerns about the complexity and reach of existing mechanisms that support innovation and business growth.
“The new R&D tax incentive framework will streamline processes, removing unnecessary bureaucratic hurdles that prevent businesses, especially small and medium enterprises, from fully benefiting from such schemes.
“The focus has been on making the system user-friendly, to ensure that businesses can easily understand and claim these incentives,” Rafizi said at a 13MP engagement session with industry players today.
Rafizi revealed that in addition to tax incentive reforms, a comprehensive overhaul of the grant system would be included in the plan.
“This initiative seeks to reduce the layers of complexity that currently prevent businesses from accessing vital funding. By simplifying the application processes and eligibility criteria, the government aims to promote more inclusive and efficient allocation of resources.
Rafiji said the reforms are part of a broader strategy to enhance the country’s competitiveness in the global market while ensuring public resources are used effectively.
“The new measures will include clearer guidelines and better communication with stakeholders, ensuring businesses understand how to navigate the updated systems. The goal is to build trust and confidence among businesses that these incentives and grants can provide meaningful support,” he explained.
Rafizi said businesses and industry groups have long advocated for such reforms, pointing to barriers created by overly complex processes. “These updates are expected to reduce frustrations and encourage broader participation across all sectors.”
The government will soon release more details on the implementation timeline and specific changes to R&D tax incentives and grants.
Rafizi said despite allocating more than RM1 billion annually for R&D, there remains a significant gap in translating research into market-ready innovations.
He shared that his ministry, along with the Ministry of Investment, Trade and Industry, is working on a comprehensive plan to enhance R&D commercialization and promote collaboration between academia, public institutions and the private sector.
“This initiative, which is expected to be presented to the Cabinet within the next few months, will play an important role in establishing Malaysia as a leader in high-value industries and global competitiveness,” he said.
Furthermore, Rafizi said, the 13MP will not only focus on improving the R&D tax incentives and grants system but also address broader systemic challenges to strengthen the country’s economic structure.
“We are adopting a sector-specific approach to economic recovery, including energy transition plans under the National Energy Policy. These reforms aim to create a strong foundation for Malaysia’s economic growth and ability to adapt to global changes.
The minister said a key focus is to optimize Malaysia’s supply chain and logistics system, pointing out that inefficiencies in the supply chain, such as high logistics costs of moving goods to regions unnecessarily, have hindered economic efficiency. Is of.
“By investing in infrastructure, data systems and regulatory framework, the government plans to enable regional delivery systems that reduce costs and improve transparency in pricing. These efforts are part of a broader strategy to streamline the movement of goods and ensure sustainability in the supply chain,” he said.
Rafizi also said that SMEs face challenges in growing and integrating into larger value chains.
“Efforts to strengthen the SME sector will focus on removing structural barriers and creating opportunities for growth, ensuring that SMEs continue to innovate and achieve economic resilience,” he said.
