Malaysia tables RM459.8 billion Budget 2027 with tax relief changes
Individual tax relief will rise to RM12,000, while MSMEs will receive a one percentage point reduction in their income tax rate.
Prime Minister Datuk Seri Anwar Ibrahim tabled Malaysia’s RM459.8 billion Budget 2027 in Parliament on Oct 9, announcing changes to personal and business taxes alongside expanded financing support. Anwar, who is also Finance Minister, said Federal operating expenditure would account for RM376.8 billion, with RM83 billion allocated to Federal development expenditure.
The Ministry of Education (MoE), Ministry of Health (MoH) and Ministry of Defence together will receive RM138.85 billion, representing 30.2 per cent of the budget, he said. The government projects GDP growth of between 4.2 and 5.2 per cent in 2027, despite expectations of continued global uncertainty.
For individuals, the government is raising the tax relief ceiling from RM9,000 to RM12,000. Anwar said the existing limit had been unchanged since 2010. The tax rate for high-income earners whose annual income exceeds RM1 million will be adjusted to 30 per cent.
Micro, small and medium enterprises (MSMEs) will receive an income tax rate reduction of one percentage point. Anwar also said Bank Negara Malaysia had agreed to add RM5 billion in financing, following an existing facility of up to RM5 billion for SMEs affected by the West Asia conflict.
Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) and Credit Guarantee Corporation Malaysia Bhd (CGC) will provide up to RM32 billion in financing in 2027. SJPP coverage will extend to mid-tier companies in all sectors, and its guarantee ceiling will rise to RM50 million.
SJPP guarantees worth RM1 billion will support local companies’ expansion through mergers and acquisitions. Anwar said financing and loan guarantee facilities would reach RM57 billion in 2027, compared with RM50 billion.
Anwar put overall resources at RM510 billion. Beyond Federal spending, this includes RM25 billion from government-linked investment companies, RM11 billion in public-private investments and RM14.2 billion from federal statutory bodies and Minister of Finance (Incorporated) (MOF Inc) companies.
