Iltizam Bill Will Reduce Corruption, Boost SME Productivity and Growth
26 March – The Small and Medium Enterprises Association (SAMENTA) Malaysia applauds the passing of the Rang Undang-Undang Iltizam Kecekapan Perkhidmatan Kerajaan (Iltizam Bill) at the Dewan Negara on 25 March 2025.
The association believes that this bold legislative move will significantly curb corrupt practices in the public sector and provide small and medium-sized enterprises (SMEs) with the much-needed boost for SME productivity, growth, and expansion.
The Iltizam Bill encapsulates key measures to strengthen governance, transparency, and accountability across government entities. Among the most notable provisions are those aimed at reducing bureaucratic red tape and promoting greater integrity within the public service, which are critical components in the fight against corruption. The provisions will also enhance efficiency and productivity, resulting in increased business profitability.
SAMENTA is optimistic that these reforms will translate into more efficient, reliable, and corruption-free interactions between SMEs and government agencies.
In line with the Economi MADANI’s target to rank among the top 25 countries in the Corruption Perception Index (CPI) by 2033, the implementation of Iltizam Bill reflects a significant commitment on the part of the government to intensify its anti-corruption initiatives.
Currently, Malaysia ranks 57th in the 2024 CPI rankings, with a score of 50. While maintaining the same ranking and score as in the previous year signals relative stability, it reflects the urgent need for comprehensive reforms to realise the nation’s long-term goal.
The Bribery and Corruption indicator, as part of the World Competitiveness Ranking (WCR) published by the Institute for Management Development (IMD), is one of the indicators that contribute to Malaysia’s CPI ranking.
In 2023, Malaysia’s standing in the WCR Bribery and Corruption indicator improved from 52nd to 46th among 67 economies, reflecting a more favourable perception of the nation’s anti-corruption landscape.
Malaysia retained the 46th position in the 2024 ranking, and its overall trend since 2004 remains a matter of concern. The nation’s best performance over the last two decades was 24th in 2007. In the wake of the latest results, Malaysia now ranks among the bottom 30 per cent of economies in this indicator, a stark reminder that perceptions of corruption among the business community remain significant.
The Iltizam Bill directly addresses these issues by introducing mechanisms to reduce regulatory burdens on businesses and to benchmark government service delivery. These mechanisms promote greater accountability and transparency across all levels of government.
By mandating periodic reviews of regulatory instruments and imposing stricter reporting requirements, the legislation will curb duplicative procedures and opportunities for corruption. The Iltizam Bill’s emphasis on clear performance benchmarks sets the stage for stronger oversight and fosters an environment where SMEs can thrive without incurring the added costs or risks of corrupt practices.
Commenting on the Iltizam Bill, Datuk William Ng, National President of SAMENTA, stated that “Iltizam Act is a significant milestone in Malaysia’s journey to becoming a cleaner, more productive, and competitive nation. Corruption disproportionately affects SMEs because they typically lack the resources to navigate the complexities of bribery-driven processes.”
“By establishing stronger guidelines for accountability and transparency, this new legislation directly addresses the primary challenges faced by our SME community. SAMENTA stands firmly behind this legislation and is prepared to work closely with our members to ensure its successful implementation. We are confident that the resulting improvements in service delivery and oversight will encourage SMEs to expand, innovate, and contribute more robustly to the country’s economic growth.”
“The Iltizam Act will help create a transparent and fairer playing field for enterprises. SMEs stand to benefit significantly, as their profitability, growth, and long-term sustainability are less likely to be undermined by irregular payments or unethical dealings. Increased governmental efficiency and clearer lines of responsibility afford SMEs the peace of mind to focus on developing new products, penetrating new markets, and creating employment opportunities for local communities.”
End of Release.
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