Personal income tax relief to rise to RM12,000 under Budget 2027
Rate cuts in two income brackets and the higher relief threshold are expected to provide up to RM1,600 in additional disposable income for approximately five million taxpayers.
The government will increase personal income tax relief from RM9,000 to RM12,000 and lower rates in two brackets under Budget 2027, Prime Minister Datuk Seri Anwar Ibrahim told Parliament. The changes are intended to ease living costs for the middle 40% of earners (M40).
The relief threshold was last changed in 2010. For resident individuals, tax rates will fall by 1% in each of two brackets: RM70,000 to RM100,000, where the rate will be 18%, and RM100,000 to RM150,000, where it will be 24%.
Relief coverage will also widen to include post-natal care, overall eldercare for grandparents and parents, sports shoes, children's tuition and educational fees, AI subscriptions, vaccinations and registered pet adoptions.
The government said the higher threshold and rate reductions would together provide approximately five million taxpayers with up to RM1,600 in additional disposable income. Individuals earning above RM1 million will face a 30% tax rate, a measure intended to maintain fiscal balance.
