Budget 2027 Malaysia: What Changes for Companies, Employers and Owners

The Federal Government's 2027 expenditure is RM459.8 billion, made up of RM376.8 billion in operating expenditure and RM83.0 billion in gross development expenditure. The fiscal deficit target is 3.3% of GDP and the revenue estimate is RM380.8 billion. The measures below are those most relevant to a private company and its owners. They are drawn from the Ministry of Finance's speech, tax measures appendices and summary of measures.

The measures were announced in the Budget and carry the effective dates stated by the Ministry of Finance. The tax measures document describes them as proposals. They take legal effect through legislation and the orders, guidelines and rulings that LHDN, Customs and other agencies issue, so confirm each item against the final law before you rely on a figure in a tax computation, a payroll run or a contract. Where the Ministry's own documents differ, this page says so.

The table below is our reading of which measures matter to which type of business. It is a guide to where to look first, not a substitute for checking your own facts.

The eligibility test in the Budget document is paid-up capital (companies) or partnership capital (LLPs) of RM2.5 million or less and annual sales of RM50 million or less. The document does not state any change to the foreign ownership rule that LHDN's public ruling applies from YA 2024, so read the two together. The Ministry estimates about 300,000 MSMEs will gain up to RM6,000.

Planning points. The new rates apply from YA 2027, which for a company with a 31 December year end is the year ending 31 December 2027. A company with a different year end should check which basis period falls into YA 2027 before it changes its instalment estimate. The paid-up capital test is measured at the beginning of the basis period in LHDN's ruling, so a share issue during the year does not by itself move a company out of the MSME band for that year. Companies near the RM50 million sales limit should model their gross income carefully, because crossing it moves the whole company to the standard 24% rate.

The accelerated allowance covers heavy machinery, plant and general machinery from local manufacturers, ICT equipment and software, and customised software development fees. Time purchases with care: expenditure incurred before 1 January 2027 falls under the current period, and expenditure from that date under the extended one.

The Ministry's documents give the Budget's minimum wage figure and date, but this page has not seen the minimum wage order that will implement it. The exact scope of the MSME exemption should be read from that order when it is issued. The speech gives no effective date for the bank account requirement, and the tax measures appendix states YA 2028.

Other employer-related announcements. The Prime Minister's speech also covers a rise in the living wage benchmark for government-linked investment companies and government-linked companies from RM3,100 to RM3,400 a month, automatic EPF registration of every citizen at age 18, EPF matching incentives of up to RM600 a year for gig workers, and SOCSO matching incentives for gig workers and for self-employed people in 17 non-mandatory sectors. These mostly affect platforms and the self-employed rather than a typical private company, but they may change what your staff and contractors expect.

If your company plans to borrow in 2027, ask your bank which of these facilities and guarantee schemes it will use, and note the stamp duty changes in section 6, which reduce the cost of some financing documents.

Procurement and construction. The Variation of Price clause is reintroduced to absorb diesel and bitumen cost increases, JKR-approved projects up to RM5 million can use the quotation method, and Bumiputera contractor procurement reserved for G1 to G4 contractors rises to RM7.5 billion. For government maintenance works, direct award is allowed up to RM200,000 and quotation up to RM3 million.

Digital. The E-Commerce Bill will be tabled at the next Parliament sitting, targeting foreign e-commerce oversight, and NADI receives RM142 million to support online business.

Entertainment duty in the Federal Territories. The standard rate stays at 25%, the reduced categories from Budget 2024 are extended to 31 December 2030, and local film screenings and local theatre performances get a 100% exemption from 1 January 2027 to 31 December 2030.

Island goods. From 1 January 2027, Langkawi and Labuan visitors on a 48-hour visit may bring in new goods worth up to RM10,000, excluding tyres and tubes, alcohol, cigarettes, tobacco and vapes.

This page covers the measures that affect most private companies and their owners. It does not cover every appendix, such as the Sukuk Prisma issuance cost deductions, the Langkawi-origin goods list, the school and university contribution deductions, or the entertainment duty exemptions for named venues. The Ministry documents reviewed for this page do not describe e-invoicing or SST rate changes beyond elderly care, so no change should be assumed. Measures aimed at individuals outside business, such as the SARA and STR cash assistance, are also outside its scope.