Free AI, tax breaks and business grants in Budget 2027 — how Malaysians stand to benefit

The Malaysian government's 2027 Budget proposes several measures to encourage the adoption of artificial intelligence (AI) among individuals and businesses. For AI users, the budget includes tax relief for subscriptions to AI software and applications, allowing taxpayers to claim these costs when filing their income tax returns.

This expansion of the existing RM2,500 individual lifestyle tax relief will apply from the 2027 year of assessment, making it easier for people to afford AI subscriptions and promoting digital literacy.

To support small businesses in adopting AI, RM30 million will be allocated through the Malaysia Digital Economy Corporation (MDEC). This funding aims to assist 4,000 micro, small, and medium enterprises (MSMEs) in automating their operations using AI technology. The initiative will also train and certify 5,000 AI professionals, contributing to the workforce needed to further AI adoption in the country.

However, individual businesses should expect varying levels of support, as the exact amount available to each applicant, qualifying expenses, and application requirements will depend on the program's implementation details.

In addition to these measures, the government is establishing a sovereign AI cloud, which will ensure that the public's data and strategic information remain under Malaysian control. This AI cloud will be managed by the Malaysian Communications and Multimedia Commission (MCMC) and the Communications Ministry, providing Malaysia with greater control over the infrastructure and data used in AI operations, especially when handling sensitive information.