Malaysia Budget 2027: Key Highlights for Businesses and Individuals

Prime Minister Dato' Seri Anwar Ibrahim tabled Budget 2027 on 9 October 2026 — the fifth MADANI Budget, themed "Reaching for the Skies, While Anchored on Our Values." Federal expenditure rises 3.6% to RM459.8 billion, with the fiscal deficit projected to narrow to 3.3% of GDP. No new broad-based tax was introduced; the Government is instead relying on wider SST coverage, e-Invoicing adoption and stronger enforcement to grow revenue. For businesses / 企业要点 • SME preferential tax rates reduced (中小企业优惠税率下调): the first RM150,000 of chargeable income falls from 15% to 14%, and the RM150,001–RM600,000 band from 17% to 16% — an SME with RM600,000 chargeable income saves roughly RM6,000 a year. • Higher capital allowances (资本减免提高) for MSMEs to support business investment. • No GST reintroduction and no carbon tax yet; SST sees targeted refinements only, including a sales tax refund facility for local traders and distributors supplying exempt manufacturers from 1 January 2027. • Salary payments must be made through financial institutions or approved cashless channels to qualify for tax deduction (薪金税务扣除新规) — MSMEs are exempted from this restriction. • The Global Services Hub incentive is enhanced with a 5% tax rate and a 30-year extension, aimed at attracting regional headquarters and treasury operations. For individuals / 个人要点 • Personal income tax relief (个人免税额) raised from RM9,000 to RM12,000 — the first review since 2010. • A 1 percentage point rate cut for middle incomes: the RM70,000–RM100,000 band falls from 19% to 18%, and the RM100,001–RM150,000 band from 25% to 24%. • The top 30% marginal rate now applies from chargeable income above RM1 million (previously RM2 million). • Minimum wage (最低薪金) rises from RM1,700 to RM2,000 from June 2027; MSMEs with annual sales below RM50 million are exempted. • STR cash aid increases by up to RM150 per month, and new reliefs cover parental care, postnatal care, sports equipment and AI software subscriptions. Compliance outlook / 合规提醒 The Government has made clear that stronger tax compliance and enforcement — including more effective use of e-Invoicing data for audit and invoice matching — will drive revenue growth in place of new taxes. Businesses that have not yet prepared for e-Invoicing should treat this as a priority; see our guide to e-Invoicing in Malaysia for the timelines and practical steps. 中文摘要：2027 年财政预算案总支出 RM459.8 billion，未推出新广基税。中小企业首 RM150,000 应税收入税率由 15% 降至 14%，RM150,001–600,000 区间由 17% 降至 16%；个人免税额由 RM9,000 提高至 RM12,000，中等收入税率下调 1 个百分点；最低薪金 2027 年 6 月起调至 RM2,000（年销售额低于 RM50 million 的中小企业豁免）。政府将加强税务执法并善用电子发票数据，企业应尽早做好合规准备。 Need help understanding how Budget 2027 affects your business or personal tax position? Speak with our partners — we are happy to walk you through the measures that apply to you.