Federal govt revenue expected to rise 4.7pc to RM380.8b in 2027, says MOF

Federal government revenue is projected to increase by 4.7% to RM380.8 billion in 2027, according to the Ministry of Finance (MoF). This estimate, driven by resilient albeit moderating economic growth, assumes a 5.8% rise in tax revenue to RM297.1 billion, or 78% of total revenue. Non-tax revenue is expected to grow marginally by 1.1% to RM83.7 billion, or 3.6% of GDP.

Petroleum-related revenue, which accounts for 16.1% of total revenue, is projected to reach RM61.2 billion in 2027, largely due to a RM32 billion dividend from Petronas. Non-petroleum revenue is anticipated to increase by 3.5% to RM319.6 billion. For 2026, petroleum-related revenue is expected to drop to 15.1% of total revenue, or 2.5% of GDP, due to a lower Petronas dividend of RM27 billion, despite higher global crude oil prices.

Non-petroleum revenue is projected to grow to RM308.7 billion. In 2026, federal government revenue is projected to rise by 6% to RM363.6 billion, driven by better-than-expected economic performance and higher global crude oil prices. Tax revenue remains the largest contributor at 77.2%, followed by non-tax revenue at 22.8%. Direct tax is forecast to increase by 4.6% to RM199.9 billion in 2027, with corporate income tax constituting 53.3% of total direct tax.

Indirect tax collection is expected to grow by 8.3% to RM97.2 billion in 2027, driven by steady business and consumption activities.