Budget 2027: Individual tax relief rises to RM12,000, income tax percentage lowered

The Malaysian government announced significant tax relief measures in its 2027 budget, aimed at alleviating the cost-of-living burden on middle-income earners. Prime Minister Datuk Seri Anwar Ibrahim revealed that individual income tax relief will be raised from RM9,000 to RM12,000, marking the first revision since 2010. Tax rates for specific income brackets have also been adjusted.

For those earning between RM70,000 and RM100,000, the tax rate will decrease to 18%, while the rate for individuals earning between RM100,000 and RM150,000 will be lowered to 24%. Furthermore, the government has expanded tax reliefs to cover a wider range of expenses. Medical tax relief will now include postpartum care services, and relief for parents and grandparents' care will encompass all care-related expenses.

Sports equipment relief will now apply to sports shoes, and education and skills training relief will cover all fields of study, along with children's tuition fees. Lifestyle tax relief will now include AI subscriptions, vaccination costs, and pet adoption from registered centers. Anwar stated that a progressive approach will be adopted, with an income tax rate of 30% for earners exceeding RM1 million.