Tax breaks, wage hike headline 2027 Budget surprises: CIMB Securities

The 2027 Budget in Malaysia has delivered larger-than-expected tax relief and a higher minimum wage, according to CIMB Securities. The basic individual tax relief increases from RM9,000 to RM12,000, while tax rates for chargeable income between RM70,001 and RM150,000 will be cut by one percentage point. This could generate annual tax savings of up to RM1,600 for about five million taxpayers, supporting middle-income consumption.

The minimum wage will rise by 17.6 per cent to RM2,000 a month from June 2027, benefiting more than four million workers. However, MSMEs with annual sales below RM50 million are exempted. The government's fiscal deficit target for 2027 is slightly better than the 3.4 per cent forecast, despite the 2026 deficit estimate being revised to 3.6 per cent.

The budget is neutral to mildly positive for Malaysian equities, with higher disposable income and targeted assistance expected to support consumer companies and housing-related businesses.

Brief written by urgent.news from New Straits Times's own syndicated text. Machine-written — may contain errors; check the original before relying on it.