The Malaysian Government has unveiled Budget 2027 under the theme “Reaching the Sky, Rooted in the Earth”. With a record national expenditure of RM510 billion, this budget serves as a national covenant aimed at balancing economic growth with fiscal responsibility.

Here is a breakdown of the key policy changes, individual reliefs, and business initiatives outlined in Budget 2027:

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1. Key Measures for Individuals & Households

• Salary & Wage Reforms: The general monthly minimum wage will increase from RM1,700 to RM2,000 starting June 2027. Additionally, a new starting wage framework introduces a RM2,500/month threshold for graduates and semi-skilled roles.

• Personal Tax Relief & Reductions:
  • Basic individual tax relief increases from RM9,000 to RM12,000—the first revision since 2010.
  • Income tax rates for the RM70,000 to RM150,000 chargeable income band are reduced by 1 percentage point.
  • Tax reliefs now extend to AI subscriptions, sports shoes, children’s tuition fees, post-natal care, and eldercare.
• Cost-of-Living Support:
  • Total STR and SARA allocations have risen to RM16 billion.
  • Non-STR adults (including M40 individuals) will receive SARA MADANI payments (RM100 x2).
  • Early Schooling Aid (BAP) increases to RM200 per student.
• Social Safety Net & Gig Economy: Automated EPF (KWSP) registration will kick in at age 18. E-hailing and p-hailing drivers will benefit from matching SOCSO (PERKESO) and EPF contributions, along with maintenance support.

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2. Boosts for Businesses & MSMEs

• Lower Corporate Tax Rates: Tax rates for Micro, Small, and Medium Enterprises (MSMEs) drop to 14% on taxable income up to RM150,000, and to 16% for the RM150,000 to RM600,000 bracket.
• Expanded Financing Facilities: Total loan and credit guarantee support for businesses reaches RM57 billion, backed by agencies including SJPP, CGC, AIM, and BSN.
• Investment in Growth Sectors: Strategic investments will focus on high-value industries like semiconductors, clean energy, a Sovereign AI Cloud, and regional hubs like the Johor-Singapore Special Economic Zone (JS-SEZ).

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3. Fiscal Discipline & Public Governance

• Fiscal Consolidation Targets: The government projects a further reduction of the fiscal deficit to 3.3% of GDP in 2027, with total national debt dropping to 63.7% of GDP.
• Governance & Oversight: Full implementation of the Government Procurement Act and the introduction of the new Government-Owned Entities Bill (RUU Entiti Milik Kerajaan) will improve oversight and transparency in public spending.