Tax Reform· Households
Individual tax relief raised to RM12,000
Self relief limit increased from RM9,000, the first review since 2010.
Malaysia Budget 2027 · Explainer
Ask the budget anything.
The fifth MADANI Budget was tabled on 9 October 2026. Here is what it means for households, workers and businesses, explained clearly and sourced from the official figures.
Budget 2027 assistant
Ask a question in plain English, or start with one of the suggestions below. Answers are based on the published Budget 2027 highlights.
AI-generated summary for general information only. Not tax advice.
The headlines
Budget 2027 at a glance
RM510b
Total budget expenditure
Up from RM470b for 2026, incl. GLIC, PPP & statutory body funding
RM459.8b
Federal government outlay
RM376.8b operating, RM83b development
3.3%
Fiscal deficit target (GDP)
From an estimated 3.6% in 2026
4.2–5.2%
GDP growth forecast 2027
Private consumption the key driver
RM16b
STR & SARA cash aid
Up from RM15b in 2026
RM2,000
New minimum wage
From RM1,700, starting June 2027
AI & digital
Building a digital-ready Malaysia
Budget 2027 continues the National AI Action Plan 2026–2030 with skills, connectivity and digital public services.
AI literacy
Free AI subscriptions for youth
100,000 more free AI subscription slots for young Malaysians, including access to ChatGPT.
Digital infrastructure
RM5b Jendela connectivity
Internet connectivity expansion targeting Orang Asli villages, roads and rail corridors.
Strategic industries
RM100m semiconductor fund
Khazanah and InvestPenang to set up a fund for semiconductor and advanced manufacturing firms.
Digital government
One individual, one record
Electronic medical records expanded nationwide; private healthcare licensing 100% online via e-CKAPS, targeting up to 65% faster processing.
Fintech
Tokenised retail savings sukuk
A tokenised sukuk that lets individuals invest and choose where funds go: education, healthcare or social protection.
Digital regulation
E-Commerce Bill
To be tabled at the next sitting to hold online platforms and sellers accountable and protect local MSMEs.
Measures explorer
What's in it for you
Who it's for
Budget pillar
32 of 32 measures
Tax Reform· Households
Lower personal income tax rates
Resident rates cut by one percentage point; RM70k–100k band to 18% and RM100k–150k band to 24%. Up to RM1,600 more disposable income for about five million taxpayers.
Tax Reform· Households
30% rate above RM1 million
Income tax rate set at 30% for chargeable income above RM1 million.
Tax Reform· Households
Expanded personal reliefs
Reliefs widened for medical expenses, parent and grandparent care, sports equipment, education, skills training and lifestyle.
Tax Reform· Businesses & SMEs
MSME tax rate cut
14% on the first RM150,000 and 16% on the next RM450,000 of chargeable income.
Business & Investment· Businesses & SMEs
Global Services Hub incentive enhanced
From 1 January 2027: 5% concessionary rate, extensions up to 30 years, withholding tax and stamp duty exemptions for treasury operations.
Tax Reform· Households
Service tax on elderly care cut to 6%
Reduced from 8% from 1 January 2027.
Business & Investment· Businesses & SMEs
RM32b business financing guarantees
Guarantee limit raised to RM50 million, plus up to RM1b to support local mergers and acquisitions.
Business & Investment· Businesses & SMEs
RM6.6b micro-financing
Including RM3b via Amanah Ikhtiar Malaysia and RM1.3b via TEKUN Nasional.
Business & Investment· Businesses & SMEs
RM5b BNM facility for affected SMEs
Additional financing for SMEs affected by the West Asia conflict.
Business & Investment· Businesses & SMEs
Halal certification matching grant
MSMEs can get up to RM5,000 for their first halal certification.
Business & Investment· Businesses & SMEs
Green investment tax allowance extended
Up to 100% investment tax allowance for green technology, EV charging and green assets until 31 December 2030.
Wages & Social Protection· Workers
Minimum wage to RM2,000
Up from RM1,700 from June 2027. MSMEs with annual sales below RM50 million are exempt.
Wages & Social Protection· Workers
RM2,500 minimum for semi-skilled and graduates
Introduced as the first step in reforming the wage framework.
Wages & Social Protection· Workers
GLC living wage RM3,400
Benchmark raised from RM3,100, benefiting 230,000 workers.
Wages & Social Protection· Students & Youth
Auto EPF registration at 18
Every citizen automatically registered as an EPF member on turning 18.
Wages & Social Protection· Workers
Gig worker EPF & SOCSO matching
EPF matching up to RM600 a year; 35% SOCSO matching, rising to 50% if platforms co-fund.
Wages & Social Protection· Workers
SOCSO for the self-employed
Government covers 70% of SOCSO contributions for over 200,000 self-employed in 17 sectors.
Cost of Living· Households
STR & SARA raised to RM16b
STR recipients get SARA of up to RM150 monthly; non-STR adults get RM100 SARA twice in 2027.
Cost of Living· Households
Senior citizen aid RM1.3b
Benefiting nearly 200,000 recipients; disability assistance raised to RM1.5b.
Cost of Living· Households
Fuel subsidies maintained
Fuel subsidies remain high at about RM40b; total subsidies and aid exceed RM80b.
Housing & Infrastructure· Households
First-home stamp duty exemption
Full exemption up to RM500,000 and 50% for RM500,001–RM750,000, for SPAs signed 2027–2030.
Housing & Infrastructure· Households
RM20b SJKP housing guarantees
To help 80,000 first-time buyers, particularly self-employed without fixed income.
Education & Health· Students & Youth
School aid raised to RM200
Per pupil, up from RM150, benefiting 5.3 million students.
Education & Health· Students & Youth
Form Six living allowance
RM2,500 for the first time, matching the matriculation rate.
Education & Health· Students & Youth
PTPTN relief
Deferment for borrowers earning up to RM2,500; RM50 minimum instalment for RM2,500–RM3,000; 10% discount for consistent repayers.
Education & Health· Workers
MediAsas insurance plan
Launches January 2027; SMEs with fewer than 75 staff get RM200 per worker first-year premium subsidy.
Education & Health· Public Servants
9,000 contract doctors made permanent
Health Ministry allocation rises to RM47.7b.
Wages & Social Protection· Public Servants
Civil servant special aid
RM1,500 for Grade B and below, RM750 for pensioners and veterans, paid in two tranches.
Wages & Social Protection· Public Servants
Minimum pension RM1,350
Up from RM1,000, benefiting nearly 59,000 pensioners.
Housing & Infrastructure· Households
RM3.3b rural infrastructure
Clean water and electricity, plus RM2.3b for rural roads.
Housing & Infrastructure· Businesses & SMEs
TNB RM15b grid investment
To strengthen the national grid and electricity supply continuity.
Fiscal breakdown
Where the money goes
Spending by category
Share of RM459.8b federal outlay (%)
Fiscal deficit path
Federal deficit, % of GDP (e = estimate, b = budget)
Sources
- MOF: 2027 Fiscal Outlook & Revenue Estimates
- MOF: Pre-Budget Statement 2027
- The Edge Malaysia: Highlights of Budget 2027
This page summarises measures as announced on 9 October 2026 for general information. Measures may change as legislation is passed. Speak to a KKHO adviser before acting on any tax change.