Budget 2027 raises individual tax relief to RM12,000 and cuts rates for selected income brackets, giving about five million taxpayers up to RM1,600 more.
KUALA LUMPUR: The government will increase individual tax relief from RM9,000 to RM12,000 and reduce personal income tax rates for selected income brackets to ease the cost-of-living burden on middle-income earners.
Finance Minister Datuk Seri Anwar Ibrahim announced the measures when tabling Budget 2027 in the Dewan Rakyat today.
“Under the measures, the resident individual income tax rate for those with chargeable income between RM70,000 and RM100,000 will be reduced to 18%, while those earning between RM100,000 and RM150,000 will see their tax rate lowered to 24%.
“The government will also expand individual tax relief to cover more expenses, including postnatal care services under medical expenses, as well as all caregiving expenses for parents and grandparents, beyond healthcare-related costs,” he said.
Anwar said tax relief for sports equipment would be expanded to include the purchase of sports shoes, while education and skills training relief would cover all fields of study and children’s tuition fees.
He added that lifestyle tax relief would also be expanded to include artificial intelligence (AI) subscriptions, vaccination costs and the adoption of pets from registered centres.
Meanwhile, Anwar said the government would adopt a progressive approach by adjusting the income tax rate for high-income earners with annual incomes exceeding RM1 million to 30%.
He said the higher tax relief and lower individual income tax rates were expected to provide additional disposable income of up to RM1,600 to about five million taxpayers.
