Budget 2027 at a Glance
Prime Minister Anwar Ibrahim tabled Budget 2027 on 9 October 2026. The measures below are as reported at the time of tabling. They are proposals until Parliament approves them and the Finance Act takes effect, so details such as effective dates and conditions can still change. Confirm the final position with LHDN or your tax agent before acting on any of it.
For Individuals
The headline change is the personal tax relief limit, which rises from RM9,000 to RM12,000. It had not been reviewed since 2010. Reports say it applies from the 2027 year of assessment, so most taxpayers would claim it when they file in 2028.
Rates are also reduced for middle-income earners: chargeable income of RM70,001 to RM100,000 is taxed at 18%, and RM100,001 to RM150,000 at 24%. The 30% rate is reported to apply to income above RM1 million. Relief categories are widened to include more medical expenses, care for parents and grandparents, education and skills training, sports equipment and some lifestyle items, and SOCSO relief is extended to mandatory Lindung Kendiri contributions. The government estimates up to RM1,600 in extra disposable income for about five million taxpayers.
For SMEs and Companies
For qualifying micro, small and medium enterprises (MSMEs), the proposed rates are 14% on the first RM150,000 of chargeable income and 16% on the next RM450,000, with 24% above RM600,000. Reports indicate this starts from the 2027 year of assessment. The current rates are 15% and 17%. The existing qualifying conditions, such as the paid-up capital and gross income limits and the limit on foreign ownership, were not reported as changing, but check them against the final legislation.
Other measures reported for businesses include:
- Companies that are not MSMEs can claim wage deductions only where wages are paid through compliant bank accounts under the Employment Act 1955. The start date was not stated in the reports we reviewed.
- Employer repayments of PTPTN loans on behalf of employees are deductible from 1 January 2027 to 31 December 2028.
- Green tax incentives are extended to 31 December 2030.
Stamp Duty and Service Tax
Stamp duty on opening savings and current accounts is fully exempted from 1 January 2027. First-time homebuyers get a full exemption on homes up to RM500,000 and a 50% exemption above that, up to RM750,000, for sale and purchase agreements signed from 2027 to 2030. Service tax on elderly care services falls from 8% to 6% from 1 January 2027. We did not find any other change to SST in the reports we reviewed.
What to Do Now
Nothing changes in your current filings yet. Over the coming months it is sensible to check three things. First, whether your company would qualify as an MSME under the final rules and what the lower rates are worth to you. Second, how you pay wages, since a non-MSME may need compliant bank payments to keep the wage deduction. Third, keep receipts for the newly covered individual relief categories so they are ready when you file.
Want to know how Budget 2027 affects your company or your personal tax? Contact Sai Associate at 016-4411190.