ABSTRACT
Small and medium enterprises (SMEs) have been identified as an integral part of industrial development to spearhead economic growth in Malaysia. In recognition of the role of SMEs in the overall national economic development, the government has introduced a number of measures in relation to fiscal policy and incentives. There are a number of general incentives initiated by the Malaysian government including pioneer status, investment tax allowance and reinvestment allowance. The period of tax relief under Pioneer Status incentives is five years commencing from the production date as determined by the Minister of International Trade and Industry. To encourage expansion and reinvestment, pioneer enterprises are eligible for a further five years tax relief period on meeting certain additional requirements. Reinvestment allowance is granted to enterprises engaged in manufacturing services and tourism sectors which incur qualifying capital expenditure for the purpose of approved expansion before 31st December 1990.
