The 2026 Malaysian Budget has been officially unveiled. Despite global economic uncertainty and geopolitical tensions, the government continues to adhere to the “Prosperous Economy” framework, aiming to balance economic stability, social welfare, and structural reforms.
This budget is not just about numbers—it reflects the country’s commitment to building economic resilience and ensuring inclusive growth in the so-called “post-conventional era.”
Core Objectives of the 2026 Budget
The 2026 budget focuses on:
- Driving structural reforms to reduce reliance on traditional industries;
- Safeguarding citizens’ quality of life and ensuring growth benefits are shared by all;
- Maintaining fiscal prudence while expanding development expenditure;
- Strengthening investor confidence to attract domestic and foreign capital into emerging sectors like semiconductors, AI, and the halal economy.
Despite ongoing external challenges, Malaysia’s GDP is projected to grow between 4%–4.5% in 2026, with a fiscal deficit target of 3.5%, signaling progress toward a healthier and more resilient fiscal structure.
Key Highlights of the 2026 Budget
As an accounting firm, we recommend that businesses and individuals closely monitor upcoming policy developments and plan their tax and financial strategies accordingly to navigate potential changes and challenges.
-Total Allocation: RM419.2 billion (RM7.1 billion increase from 2025)
-Fiscal Deficit: 3.5%
-Development Expenditure: RM81 billion; Administrative Expenditure: RM338.2 billion
-Total Revenue: RM343.1 billion
-GDP Growth Forecast: 4–4.5%
-Johor-Singapore Economic Zone: RM37.1 billion invested, 66% of Johor’s total investment, with RM29 billion in new commitments
-GLIC Investments: Domestic investment increased from RM25 billion to RM30 billion
-Semiconductors: RM550 million invested by Khazanah & retirement funds
-Other Initiatives: Modernization of Islamic finance, halal industry, and ASEAN cross-border power grid development
-Government Guarantees & Loans: Increased to RM50 billion
-Microfinance: BSN & TEKUN provide RM2.5 billion
-SJPP Guarantees: Increased from RM20 billion to RM30 billion, covering micro-enterprises
-Cooperatives: RM50 million financing fund for Malaysian Cooperative Commission
Tax Incentives:
-New food production projects: 100% tax exemption for 10 years, expansion projects for 5 years
-SMEs in AI & cybersecurity training: extra 50% tax deduction
Digital Measures: Full implementation of e-invoicing and self-declaration stamp duty system
-Targeted Fuel Subsidies: Expected savings RM2.5 billion; total savings RM15.5 billion
-Love Assistance (STR) & SARA: RM100 monthly for 9 million recipients
-eKasih Low-Income Families: RM200/month, singles RM50/month
-Back-to-School Aid: RM150 per student, total RM800 million
-First-Time Homebuyers: Stamp duty exemption extended
-Taxi & Private Ride-Hailing Vehicles: Domestic tax and road tax exemptions for locally-made cars
-PTPTN “Free Education”: 5,800 underprivileged students benefit, RM120 million allocated
-Full Loan Repayment Exemption: 6,000 low-income honours graduates annually, RM90 million allocated
-TVET (Technical & Vocational Education Training): Allocation increased to RM7.9 billion
-Children with Learning Disabilities: Tax deduction limit increased to RM10,000
-Youth Development: Youth age range adjusted to 15–30, RM250 million for national service, fully implemented by 2027
-SALAM Subsea Cable: 3,190 km, RM2 billion investment connecting Peninsular, Sarawak & Sabah
-JENDELA 2: Covering 2,700 new locations, 80% network coverage by 2026
-Mobile Banking: Expanded to 20 providers in remote areas
-MyDigital ID: Target 15 million users by year-end
-Digital Tax Stamp: Anti-counterfeit and tax leakage prevention
-Tourism: Over RM700 million allocated; target 47 million tourists, RM329 billion tourism revenue
-Personal Tax Relief: Up to RM1,000 for cultural or tourism activities
-Industry Development: RM300 million to support SMEs and high-tech industries (AI, semiconductors, digitalization, sustainability)
-Rice Farmers: RM100 million for irrigation & infrastructure; RM20 million for fertilizers
-Fishermen: Monthly allowance up to RM300, RM160 million for fishing incentives; diesel subsidy RM1.65/litre
-Rural Infrastructure: RM3.3 billion for roads, bridges, electricity, water
-Public Markets & Stalls: RM60 million
-Health Ministry Allocation: RM46.5 billion (higher than 2025’s RM45.3 billion)
-Tobacco & Alcohol Tax: Cigarettes +RM0.02 each, cigars +RM40/kg, heated tobacco +RM20/kg; alcohol consumption tax 10%
-Disaster Management (NADMA): RM460 million, flood protection RM2.2 billion
-Carbon Tax: Introduced in 2026, initially targeting steel & energy industries
-Digital Forensics Upgrade: RM32 million for cybercrime & sexual assault cases
-“Second Chance” Program: RM15 million for former addicts, ex-prisoners, and micro-enterprise victims
-Indigenous Communities: RM412 million to enhance education and empowerment
-Single Mothers: Legal aid benefits 5,000 women
-Petronas Dividend: RM12 billion (down 37% from 2025)
-Scrap-to-New Car Subsidy: Up to RM4,000
-Government Hospitals & Clinics: RM1.2 billion for maintenance
-Clean Water System: RM13 billion investment, replacing 820 km old pipes
-STR Phase 4: Early distribution on 18 October
-Deepavali: Half-price tolls on highways
Back-to-School Aid: RM150 per student, total RM800 million
**资料更新至10.10.2025
(201706002678 & AF 002133)