Kuala Lumpur: Budget 2027 seeks to address cost-of-living pressures while strengthening Malaysia’s competitiveness and supporting sustainable economic growth, according to Farah Rosley, Malaysia Tax Leader, Ernst & Young Tax Consultants Sdn. Bhd. (pic).
In a statement, Farah said the RM459.8 billion Budget, the fifth under the Madani framework, was tabled amid global geopolitical uncertainty, supply-chain disruptions, technological transformation and higher energy costs.
Despite its expansionary approach, the Budget aims to reduce the fiscal deficit to 3.3 per cent of gross domestic product in 2027, reflecting the government’s continued commitment to fiscal consolidation.
She said measures to increase Sumbangan Tunai Rahmah and Sumbangan Asas Rahmah allocations, raise the minimum wage from RM1,700 to RM2,000 from June 2027 and strengthen social protection for gig workers would help households manage financial pressures.
It added that higher individual income tax relief, selected tax rate reductions and support for micro, small and medium enterprises (MSMEs) could improve disposable income, ease business costs and support domestic demand.
She also highlighted incentives for strategic industries, technology adoption, green investment and startups, alongside measures to improve access to financing and develop workforce capabilities.
The enhanced Global Services Hub incentive, which includes a preferential five per cent tax rate for qualifying companies and eligible income, as well as potential incentive renewals over periods of up to 30 years, was described as a development that could strengthen Malaysia’s appeal as a regional business hub.
However, Farah said clear implementation guidelines, policy certainty and timely guidance would be important in helping businesses make long-term investment decisions.
It also pointed to proposed governance reforms, including a Government-Owned Entities Bill and greater transparency in public procurement, as measures that could strengthen accountability and public confidence.
She said the Budget’s longer-term impact would depend on effective implementation, productivity improvements, workforce development and stronger public-private collaboration.
