Burning forests to make way for farming is also thought to be behind the enormous fires currently ripping through the Amazon in South America, and experts believe they could have a serious impact on the global climate.
Malaysian Environment Minister Yeo Bee Yin expressed concerns about the impact of the smog and offered assistance to Jakarta to fight the fires during a meeting with Indonesian officials Tuesday, according to a statement.
An official in Sarawak state on Borneo -- where air quality dropped to very unhealthy levels this week -- was less diplomatic, demanding Indonesia send face masks and medical supplies to Malaysia for those affected by the pollution.
"Until they suffer economically, they will not take our complaints seriously," Sarawak Deputy Chief Minister James Masing was cited as saying by the Malay Mail news portal on Wednesday.
"The Indonesian government must bear the full brunt of responsibility of the haze in Sarawak."
Air quality also plummeted to unhealthy levels in Kuala Lumpur this week as toxic smog drifted in and shrouded the skyline, while over 400 schools were closed in the Malaysian part of Borneo due to the smoke.
Borneo is shared between Indonesia, Malaysia and Brunei.
Despite the pressure from its neighbour, Indonesia insisted Wednesday the smog in Malaysia was caused by fires there.
A statement from the environment ministry and weather agency said the number of "hotspots" -- areas of intense heat detected by satellite which typically indicate fires -- in peninsular Malaysia had risen significantly.
However, the Malaysian environment ministry referred journalists to information on hotspots published by the Singapore-based ASEAN Specialised Meteorological Centre.
According to the centre, there were 861 hotspots on Indonesian Borneo and the Indonesian island of Sumatra as of September 10, and just seven in the whole of Malaysia.
Indonesia has deployed thousands of security forces who are fighting a desperate battle against the blazes, which have reduced once-verdant areas of forest to charred wastelands and darkened the skies with acrid smoke.
Indonesian forest fires are an annual problem during the dry season but this year's are the worst since 2015, when the region was choked by toxic smoke for weeks.