2027 Belanjawan Key Highlights

1. Malaysia’s GDP Growth Forecast at 4.2%–5.2% in 2027
Malaysia’s economy is projected to grow between 4.8% and 5.3% in 2026, followed by an estimated growth rate of 4.2% to 5.2% in 2027.
2. Fiscal Deficit Target Reduced to 3.3% in 2027
Due to higher international oil prices and increased fuel subsidy costs, the Government revised its 2026 fiscal deficit target from 3.5% to 3.6% of GDP, representing an estimated deficit of RM78.515 billion.
The Government aims to reduce the fiscal deficit to 3.3% in 2027 and further lower it to 3% by 2029.
3. Federal Government Debt Increased by 4.4%
Federal Government debt increased by RM58.1 billion, representing a 4.4% increase compared with the end of 2025.
However, the debt-to-GDP ratio declined by 2.1% as the economy continued to expand.
4. RM510 Billion Allocated for Government Expenditure and Investments
Budget 2027 mobilises RM510 billion in total government expenditure and investment resources, including RM459.8 billion in Federal Government operating and development expenditure.
5. International Trade and Investment Continue to Grow
Malaysia recorded total trade of RM2.5 trillion during the first eight months of 2026, with exports reaching RM1.36 trillion.
Approved investments totalled RM218.5 billion in the first half of 2026.
6. GEAR-uP Initiative to Mobilise RM25 Billion in Domestic Investments
The Government aims to mobilise RM25 billion in domestic investments through the GEAR-uP initiative to strengthen local businesses and encourage investment in high-value industries.

1. Individual Income Tax Relief Increased to RM12,000
The basic individual income tax relief will increase from RM9,000 to RM12,000, reducing the tax burden on individual taxpayers.
2. Revised Personal Income Tax Rates

• Chargeable income between RM70,000 and RM100,000: Tax rate reduced to 18%.
• Chargeable income between RM100,000 and RM150,000: Tax rate reduced to 24%.
• High-income individuals earning more than RM1 million annually: Tax rate adjusted to 30%.

3. Expanded Medical and Family Care Tax Relief
Medical expense relief will be extended to include postnatal care services.
Tax relief for parents and grandparents will also be expanded to cover broader caregiving expenses beyond medical and healthcare costs.
4. Expanded Education and Learning Tax Relief
Education and skills development relief will cover all fields of study, including tuition fees incurred for children’s supplementary education.
5. Sports Tax Relief Extended to Sports Shoes
The purchase of sports shoes will be included under eligible sports equipment expenses for tax relief purposes.
6. AI Subscriptions and Pet-Related Expenses Included in Lifestyle Tax Relief
Lifestyle tax relief will be expanded to include artificial intelligence (AI) subscription fees, as well as eligible pet vaccination and adoption expenses through registered centres.
7. Additional Tax Relief for Social Security Contributions
Individuals voluntarily participating in the Skim Lindung 24 Jam or self-employed social security protection schemes may claim additional tax relief of up to RM150.
8. Tax Deductions for Education and Public Donations
Eligible donations to school public contribution funds and public universities may qualify for tax deductions of up to 10% of aggregate income.

1. SME Corporate Income Tax Rate Reduced by 1%
The Government announced a one-percentage-point reduction in the corporate income tax rate for eligible micro, small and medium enterprises (MSMEs).
This measure aims to reduce business operating costs and improve financial sustainability.
2. Additional Conditions for Salary Expense Tax Deductions
Companies other than MSMEs must pay employee salaries through bank accounts or other channels permitted under the Employment Act 1955 to qualify for the relevant salary expense tax deductions.
3. Tax Deductions for Employers Repaying Employees’ PTPTN Loans
Employers who repay employees’ National Higher Education Fund Corporation (PTPTN) loans may qualify for tax deductions.
The incentive is applicable from 1 January 2027 to 31 December 2028.
4. Tax Deductions for Participating in MADANI Talent Training Programmes
Companies implementing eligible MADANI talent training programmes may qualify for tax deductions to encourage employee skills development.
5. Tax Deductions for Donations to Student Kitchen Programmes
Individuals and organisations contributing food or equipment to eligible student kitchen programmes may qualify for tax deductions.
The incentive applies from 1 January 2027 to 31 December 2030.
6. Income Tax Exemption for Malaysian Shipping Companies Extended to 2036
The existing full income tax exemption for eligible Malaysian shipping companies will be extended until the Year of Assessment 2036.
7. 40% Income Tax Exemption for Islamic Fund Management Services
Eligible Shariah-compliant fund management service providers may enjoy a 40% income tax exemption from the Years of Assessment 2028 to 2030.
8. Forest City Family Offices Eligible for Up to 20 Years of Zero Tax
Under the Forest City Single Family Office (SFO) incentive scheme, qualifying income may enjoy a zero tax rate for up to 20 years.
Licensed fund managers may also be permitted to provide services to multiple families.
9. Additional Tax Incentives to Support Businesses
The Government will introduce further tax incentives to help businesses reduce operational costs, improve cash flow and enhance productivity.

1. Microfinancing Allocation Increased to RM6.6 Billion
The Government will increase microfinancing facilities to RM6.6 billion in 2027 to support small businesses, entrepreneurship and income-generating activities.
2. RM32 Billion in Financing Guarantees
Syarikat Jaminan Pembiayaan Perniagaan (SJPP) and Credit Guarantee Corporation (CGC) will provide up to RM32 billion in financing guarantees.
Total annual financing and guarantee facilities are expected to reach RM57 billion.
3. Bank Negara Malaysia to Provide Additional RM5 Billion Financing
Bank Negara Malaysia will allocate an additional RM5 billion in financing facilities to assist SMEs affected by the conflict in West Asia.
4. RM30 Million to Accelerate SME AI Adoption
The Malaysia Digital Economy Corporation (MDEC) will receive RM30 million to help approximately 4,000 MSMEs adopt artificial intelligence and business automation.
5. Greater Support for Startups and Medium-Sized Enterprises
The Government will strengthen financing and development support for startups and medium-sized enterprises, helping businesses scale operations and enter high-value industries.
6. RM1 Billion Financing to Support SME Exports
The Government will provide RM1 billion in financing support to help MSMEs expand into international markets.
7. RM2 Billion Investment to Support Bumiputera Enterprises
Government-linked investment companies (GLICs) will invest RM2 billion to support Bumiputera business development, including corporate listings and strategic property investments.
8. Government Procurement for Bumiputera G1–G4 Contractors Increased to RM7.5 Billion
The Government will increase dedicated procurement opportunities for Bumiputera G1 to G4 contractors from RM4 billion to RM7.5 billion.

1. National Minimum Wage Increased to RM2,000
Malaysia’s national minimum wage will increase from RM1,700 to RM2,000 per month, representing a 17.6% increase.
The revised minimum wage is expected to take effect in June 2027 and benefit more than four million employees.
2. Minimum Wage Adjustment Exemption for MSMEs
MSMEs with annual turnover below RM50 million will receive an exemption to allow additional time for operational adjustments.
Further details regarding the exemption period and eligibility requirements are expected to be announced.
3. RM2,500 Minimum Salary for Semi-Skilled Workers and Graduates
The Government proposes a minimum salary of RM2,500 for semi-skilled occupations and graduates.
The specific scope and implementation timeline remain subject to further announcements.
4. Living Wage for Government-Linked Companies Increased to RM3,400
The living wage for government-linked investment companies and government-linked companies will increase from RM3,100 to RM3,400 per month.
Approximately 230,000 employees are expected to benefit.
5. Expanded SOCSO Protection for Self-Employed Individuals
The Government will provide a 70% matching contribution incentive for self-employed individuals across 17 sectors where social security contributions are not compulsory.
More than 200,000 individuals are expected to benefit.
6. EPF Matching Contributions for E-Hailing and Delivery Workers
Eligible e-hailing drivers and delivery workers may receive EPF matching contributions of up to RM600 annually, subject to a lifetime limit of RM6,000.
7. Financing Support for Gig Workers
Bank Simpanan Nasional (BSN) and Agrobank will provide RM270 million in financing to assist gig workers in starting businesses or purchasing their first homes.
8. Encouraging Fair Wage Adjustments in the Private Sector
The Government encourages private companies to implement salary adjustments that reflect employees’ qualifications, skills and capabilities.

1. STR and SARA Allocations Increased to RM16 Billion
The combined allocation for Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) will increase from RM15 billion to RM16 billion in 2027.
2. STR Recipients Eligible for Up to RM150 Monthly SARA Assistance
Eligible STR recipients may receive up to RM150 per month under SARA, equivalent to a maximum of RM1,800 annually.
Approximately nine million recipients are expected to benefit.
3. RM200 SARA Assistance for Non-STR Recipients Aged 18 and Above
Malaysian citizens aged 18 and above who are not STR recipients will receive RM200 in SARA assistance, distributed in two payments of RM100 each.
The assistance is expected to benefit approximately 13 million Malaysians, including middle-income households.
4. Minimum Pension for Retired Civil Servants Increased to RM1,350
The minimum monthly pension for retired civil servants will increase from RM1,000 to RM1,350.
5. Basic Credit Cards with Interest Rates Capped at 14%
Three banks have introduced basic credit cards with annual interest rates capped at 14% to reduce borrowing costs for cardholders.
6. Bankruptcy Threshold Increased to RM150,000
The bankruptcy threshold will increase from RM100,000 to RM150,000 beginning in 2027.
7. My50 Pass Maintained and MyKomuter RM50 Monthly Pass Introduced
The Government will continue the My50 public transport pass and introduce the MyKomuter RM50 monthly pass to reduce commuting expenses.

1. Stamp Duty Exemptions for First-Time Homebuyers
First-time homebuyers purchasing residential properties valued at up to RM500,000 may enjoy full stamp duty exemption.
For properties valued at up to RM750,000, full stamp duty exemption will apply to the first RM500,000, with a 50% exemption on the remaining amount.
The measure applies to sale and purchase agreements signed between 1 January 2027 and 31 December 2030.
2. Development of Bandar MADANI Bukit Jalil
The Government will develop Bandar MADANI Bukit Jalil as an integrated residential community with public facilities, including a vertical school concept.
3. 2,500 MADANI Homes to Be Developed in Belfield, Kuala Lumpur
Approximately 11 acres of government land in Belfield will be developed into 2,500 MADANI housing units, with 70% reserved for Bumiputera buyers.
4. RM1.26 Billion Allocated to FELDA
The Federal Land Development Authority (FELDA) will receive RM1.26 billion to strengthen financial sustainability, maintain roads and improve housing for second-generation settlers.
5. Reintroduction of Variation of Price (VOP) Clauses
The Government will reintroduce Variation of Price (VOP) clauses to help construction contractors manage rising diesel and bitumen costs.
6. Quotation-Based Tendering for Community Projects Below RM5 Million
Eligible community infrastructure projects valued below RM5 million may be implemented through quotation-based procurement procedures to improve project delivery efficiency.

1. Ministry of Health Allocation Increased to RM47.7 Billion
The Ministry of Health will receive RM47.7 billion in 2027, an increase of RM1.2 billion from RM46.5 billion.
2. More Than 9,000 Contract Doctors to Receive Permanent Positions
The Government will provide over 9,000 permanent positions for doctors in 2027 to strengthen the public healthcare workforce.
3. Increased Allowances for Healthcare Professionals
The Pos Basik professional qualification incentive for approximately 47,000 healthcare personnel will increase from RM100 to RM200 per month.
The air medical service allowance will also increase from RM30 to RM100.
4. RM200 Million to Reduce Hospital Waiting Times
Additional funding will support patient referrals to other hospitals and greater use of private hospital facilities and operating theatres.
5. RM1 Billion to Accelerate Electronic Medical Records
The Government, through MCMC, will invest RM1 billion to accelerate electronic medical record implementation across healthcare institutions.
6. MediAsas Affordable Medical Insurance Introduced in 2027
The Government plans to introduce MediAsas in January 2027, providing affordable medical insurance and standardised hospital charges based on diagnosis and treatment categories.
7. EPF Account 2 May Be Used to Pay Medical Insurance Premiums
EPF members below 55 may use their Sejahtera Account savings to pay eligible MediAsas insurance premiums.
8. RM200 Medical Insurance Subsidy for SME Employees
Businesses with fewer than 75 employees may receive a RM200 first-year premium subsidy for each eligible employee, limited to 50 employees per company.
9. Greater Transparency in Private Hospital Charges
Standardised private hospital billing classifications will be introduced in 2027.
The new e-CKAPS online medical licensing platform is also expected to reduce licensing approval times by up to 65%.
10. Expanded Healthcare Assistance and Medical Equipment Funding
Key allocations and initiatives include:

• Medical Assistance Fund increased to RM60 million.
• RM80 million allocated to PeKa B40.
• Continuation of the MySalam protection scheme.
• Affordable fertility treatment for 2,000 couples through the BuAi programme.
• Expanded thalassaemia screening services.
• RM1.2 billion for hospital and clinic maintenance.
• More than RM770 million for advanced medical equipment.
• Procurement of 400 new ambulances.
• Introduction of robotic surgery at Universiti Sains Malaysia Specialist Hospital.
• Upgrading facilities at 18 healthcare training institutions.

11. Service Tax on Elderly Care Reduced to 6%
Effective 1 January 2027, the service tax rate for elderly care services will be reduced from 8% to 6%.
Annual eligible elderly care expenses not exceeding RM96,000 will be fully exempted from service tax.
12. Senior Citizen Assistance Allocation Increased to RM1.3 Billion
The Government will increase financial assistance for senior citizens to RM1.3 billion, benefiting nearly 200,000 recipients.
A Senior Citizens Bill will also be developed to strengthen elderly protection and care.

1. Back-to-School Assistance Increased to RM200
The Back-to-School Assistance payment will increase from RM150 to RM200 per eligible student, benefiting approximately 5.3 million students.
2. RM2,500 Living Allowance for Form Six Students
Form Six students will receive a RM2,500 living allowance aligned with the assistance provided to matriculation students.
Approximately 90,000 students are expected to benefit.
3. Revised PTPTN Loan Repayment Measures

• Monthly income of RM2,500 or below: Eligible borrowers may defer PTPTN repayments.
• Monthly income between RM2,500 and RM3,000: Minimum monthly repayment of RM50 for eligible borrowers.
• Borrowers with no arrears who consistently repay on time: Eligible for a 10% repayment discount.
• More than 400,000 borrowers are expected to benefit.

4. RM19.1 Billion Allocated to Higher Education
The Ministry of Higher Education will receive RM19.1 billion, including RM800 million to upgrade lecture halls, student accommodation and ageing campus facilities.
5. Proposed Repeal of the Universities and University Colleges Act (AUKU)
The Government is developing a new higher education legal framework addressing university autonomy, academic freedom and student rights.
Relevant disciplinary proceedings involving freedom of expression and peaceful assembly at public universities will also be discontinued.
6. RM750 Million Investment in University Accommodation
KWAP will invest RM750 million through the Vista Kampus programme to develop student accommodation at six selected universities.
The first phase of Universiti Malaya’s student accommodation project is expected to be completed by 2031.
7. Expansion of the Dapur Siswa MADANI Programme
RM20 million will be allocated to expand student kitchen programmes to polytechnics and teacher education institutions, including meals priced at RM5.
8. FLYsiswa Flight Assistance Increased to RM500
The FLYsiswa MADANI flight subsidy will increase from RM400 to RM500 in 2027, benefiting more than 60,000 students.
9. RM870 Million Allocated to Student Supplementary Food Programmes
The Government will provide food assistance to more than 800,000 students to support their nutritional needs.
10. Construction of 3,500 Additional Primary School Classrooms
The Government will build 3,500 additional classrooms to accommodate approximately 500,000 new Year One students in 2027.
A new Chinese primary school will also be developed in Bandar Mahkota Cheras.
11. Teaching Assistant Programme Expanded to 200 Primary Schools
The teaching assistant programme will be expanded to 200 primary schools, particularly those with high student enrolment, to reduce teachers’ administrative workloads.
12. RM8 Billion Allocated to TVET
RM8 billion will be allocated to Technical and Vocational Education and Training (TVET) initiatives to improve youth employability and workforce skills.

1. TNB to Invest RM15 Billion in National Grid Upgrades
Tenaga Nasional Berhad (TNB) will invest RM15 billion to strengthen the national electricity grid and support long-term energy security.
2. RM1.5 Billion Investment in Solar Parks
The Government will invest RM1.5 billion in centralised solar parks for government buildings.
A 150-megawatt allocation will be reserved for Bumiputera businesses.
3. Up to 100% Investment Tax Allowance for Green Technology
Companies purchasing eligible green technology assets for their own use or investing in qualifying sustainability and electric vehicle charging projects may enjoy an Investment Tax Allowance of up to 100%.
4. Green Technology Tax Incentives Extended Until 2030
Selected tax incentives for green projects and EV charging infrastructure will be extended until 31 December 2030.
5. KWAP to Establish RM1 Billion Climate Fund
KWAP will establish a RM1 billion climate fund to support climate-related investments and energy transition initiatives.
6. Up to RM200 Rebate for Energy-Efficient Appliances
Under the NUR MADANI programme, eligible consumers purchasing energy-efficient air conditioners and refrigerators may receive rebates of up to RM200.
7. Improved Electricity Supply in Rural and Indigenous Communities
The Government will improve electricity infrastructure in religious schools and Orang Asli villages, including the installation of solar streetlights.
8. RM65 Million for Biodiversity Conservation
RM65 million will be allocated to support approximately 2,500 community rangers involved in biodiversity and environmental protection.

1. RM3.4 Billion to Improve LRT and MRT Services
Prasarana Malaysia will invest more than RM3.4 billion to upgrade and maintain its Light Rail Transit (LRT) and Mass Rapid Transit (MRT) systems.
2. Additional Safety and EV Charging Facilities Along PLUS Highway
The PLUS Highway will be equipped with 70 additional CCTV cameras, 50 EV charging facilities and 15 motorcycle shelters.
3. Construction of a 22km Covered Walkway in Kuala Lumpur
Kuala Lumpur City Hall will develop a 22km covered pedestrian walkway connecting key landmarks, including the National Mosque, Merdeka Square and Central Market.
4. RM2.3 Billion for Rural Road Development
The Government will increase rural road development funding to RM2.3 billion to improve accessibility and transport connectivity.
5. RM40 Million for Road Pothole Repairs
The Government will increase funding to RM40 million to accelerate pothole repairs and other minor road maintenance works.
6. RM2.5 Billion to Improve National Water Supply
The Government will invest RM2.5 billion in water infrastructure upgrades, including replacing approximately 1,900km of ageing water pipelines under initiatives to reduce non-revenue water.
7. Perak and Penang Sign 40-Year Water Supply Agreement
The two state governments have reached a long-term bulk water supply agreement to strengthen future water security.
8. 48 New Security Scanners for International Airports
Kuala Lumpur, Penang and Kota Kinabalu international airports will receive 48 additional passenger and baggage security scanners.
9. RM5 Billion to Strengthen National Internet Connectivity
The Government aims to improve telecommunications coverage nationwide, including expanding 4G access to Orang Asli villages.

1. RM2.62 Billion in Assistance for Paddy Farmers
The Government will allocate RM2.62 billion to support paddy farmers, with assistance averaging approximately RM4,300 per hectare.
Support includes seeds, fertilisers, pesticides, land preparation and rice price subsidies.
2. Fishermen Eligible for Up to RM300 Monthly Assistance
RM178 million will be allocated for fishing incentives and living allowances, with eligible fishermen receiving up to RM300 monthly.
3. RM40 Million Financing for Aquaculture Development
Agrobank will provide RM40 million in financing to support modern aquaculture projects, including Biofloc technology for tilapia farming.
4. More Than RM1 Billion Financing for Agricultural Businesses
Agrobank, Bank Rakyat and the Malaysia Co-operative Societies Commission (SKM) will provide more than RM1 billion in financing to support agricultural modernisation and downstream industries.
Key areas include premium chocolate production and agarwood-related industries.
5. Special Sampan Licence Quota Increased to 20,000
The Government will allocate RM30 million to increase the Special Sampan (Sampan Khas) licence quota from 17,000 to 20,000.

1. Johor-Singapore Special Economic Zone Attracts RM132 Billion in Investments
The Johor-Singapore Special Economic Zone (JS-SEZ) recorded RM132 billion in investments between 2025 and June 2026, reflecting growing interest in cross-border economic cooperation.
2. RM7 Billion Financing for Seven Strategic Industries
Bank Pembangunan Malaysia Berhad (BPMB) will provide RM7 billion in financing to support strategic industries, including renewable energy, logistics, aerospace and semiconductors.
3. Expanded AI Talent Development Initiatives
AI Malaysia Berhad will receive nearly RM15 million to support the national ambition of developing 200,000 AI professionals.
4. 100,000 Additional Free AI Subscriptions for Youth
The Government will expand its free AI subscription initiative by adding 100,000 places and including applications such as ChatGPT.
5. Greater Support for Business Digitalisation and Productivity
Through financing, technology adoption and automation initiatives, the Government aims to help businesses improve productivity, strengthen competitiveness and accelerate digital transformation.

1. Stronger Compensation Requirements for Drink-Driving and Drug-Driving Offences
The Government plans to amend existing legislation to strengthen compensation responsibilities for drivers involved in accidents caused by alcohol or drug impairment.
2. Remote Monitoring Systems for Commercial Vehicles
Commercial vehicles will be required to install remote monitoring systems as part of measures to strengthen road and transport safety.
3. Proposed New E-Commerce Bill
The Government plans to table a new E-Commerce Bill (RUU E-Dagang) during the next parliamentary session to strengthen oversight of foreign e-commerce operators.
4. Introduction of the Government Entities Bill
The Government will introduce the Government Entities Bill (RUU Entiti Milik Kerajaan) to improve governance and accountability among government entities, government-linked companies and statutory bodies.
5. AI Application to Strengthen Scam Prevention
The National Scam Response Centre will develop an AI-powered application to help the public verify suspicious phone numbers, bank accounts and website links.
6. RM22 Billion Each for Defence and Home Affairs
The Ministry of Defence and Ministry of Home Affairs will each receive RM22 billion in allocations.
An additional RM7.1 billion will be allocated for the procurement and maintenance of security equipment and assets.
7. Increased Allowances for Volunteer Personnel
RM339 million will be allocated to increase allowances for RELA personnel, auxiliary firefighters, police volunteers and civil defence volunteers.
Hourly allowances will range from RM9 to RM10.80.
8. Strengthened Disaster Management Support
The National Disaster Management Agency (NADMA) will receive RM260 million.
Housing repair assistance for disaster victims will also increase from RM5,000 to RM10,000.
9. Upgraded Flood Prevention and Emergency Response Infrastructure
Nearly RM320 million will be allocated to improve slopes, drainage systems and related infrastructure.
The Government will also procure 17 amphibious boats to strengthen emergency rescue capabilities.

1. Visit Malaysia Campaign Extended to 2027
The Government will extend Visit Malaysia activities into 2027, with RM935 million allocated to promote tourism, cultural activities and related industries.
2. RM130 Million to Support the Creative Economy
More than RM130 million will be allocated to support Malaysia’s creative content industry, including local and international film, video and audiovisual productions.
3. Entertainment Tax Exemptions for Selected Cultural Activities
Eligible arts, cultural, entertainment and sporting activities held at designated venues, as well as qualifying local film and theatre tickets, will benefit from entertainment tax exemptions.
4. RM80 Million for Non-Muslim Places of Worship
The Government will increase maintenance funding for non-Muslim places of worship to RM80 million to improve religious facilities and infrastructure.
5. More Than RM100 Million for Chinese New Village Infrastructure
More than RM100 million will be allocated for infrastructure improvements and maintenance projects in Chinese New Villages.
6. MITRA Allocation Increased to RM150 Million
Funding for the Malaysian Indian Transformation Unit (MITRA) will increase to RM150 million, with a focus on youth training, employment opportunities and community development.
7. RM200 Million for the Sejahtera MADANI Programme
The Government will allocate RM200 million for equipment and skills training assistance under Sejahtera MADANI.
Approximately 40,000 individuals are expected to benefit, with particular emphasis on empowering women and improving livelihoods.