Tax experts say the Budget 2027 tax relief package targets middle-income taxpayers and MSMEs. It may also increase the tax load on individuals earning above RM1 million.
Prime Minister Datuk Seri Anwar Ibrahim tabled the budget on Friday. The headline change is basic individual relief rising to RM12,000 from RM9,000.
What Is Changing in Budget 2027 Tax Relief?
- Basic relief: RM9,000 to RM12,000, the first revision since 2010
- RM70,000 to RM100,000 band: rate cut to 18% from 19%
- RM100,000 to RM150,000 band: rate cut to 24% from 25%
- Top 30% rate: now applies above RM1 million, down from RM2 million, from 2027
How Much Could a RM100,000 Earner Save?
An individual with RM100,000 chargeable income could save about RM840 in tax. At RM150,000, total savings rise to about RM1,520.
The savings come from the higher relief and lower rates working together. Tax experts say this helps households manage rising living costs.
Who Pays More Under the RM1 Million Top-Rate Change?
The rate for the RM1,000,001 to RM2,000,000 band rises to 30% from 28%. Taxpayers in that band could face up to RM20,000 in extra tax, depending on their chargeable income.
The measure partly offsets revenue forgone from the middle-income cuts. It shifts part of the burden towards those with a greater ability to pay.
Dividend income follows separate rules. From YA2025, individuals pay 2% tax on Malaysian dividend income above RM100,000 a year, and no capital gains tax applies to shares listed on Bursa Malaysia. Read the Dividend Investing Guide for more on dividend income.
Does the MSME Rate Cut Change the Picture for Bursa Companies?
The MSME rate falls to 14% from 15% on the first RM150,000 of chargeable income. The rate on income from RM150,000 to RM600,000 drops to 16% from 17%.
The source names no Bursa-listed company, so it cannot show how these cuts affect any stock’s earnings. Investors may want to watch company results for any tax effect once the measures take effect.
Why Does the Fiscal Deficit Target Matter in Budget 2027?
The fiscal deficit is projected to narrow to 3.3% of GDP in 2027 from 3.6% in 2026. The budget also raises the minimum wage and boosts support for gig workers.
These steps may lift labour costs for some businesses. They could also strengthen household purchasing power and domestic demand.
Key Takeaways
- Basic individual relief rises to RM12,000 from RM9,000.
- Rates fall to 18% (RM70,000 to RM100,000) and 24% (RM100,000 to RM150,000).
- Savings of about RM840 at RM100,000 and about RM1,520 at RM150,000.
- The 30% top rate applies above RM1 million, with up to RM20,000 extra tax in the RM1 million to RM2 million band.
- MSME rates fall to 14% and 16%, and the fiscal deficit narrows to 3.3% in 2027.
Disclaimer: This article is general information, not financial or tax advice, and it does not recommend any stock. Do your own research and consult a licensed adviser before making decisions.
Frequently Asked Questions
How much is the basic individual tax relief under Budget 2027?
The basic individual tax relief rises to RM12,000 from RM9,000 under Budget 2027. It is the first revision to this limit since 2010.
How much tax can a RM100,000 earner save under Budget 2027?
An individual with RM100,000 chargeable income could save about RM840, according to tax experts quoted by The Edge. At RM150,000, the estimated saving is about RM1,520.
Who pays the higher 30% tax rate under Budget 2027?
The 30% top rate applies to taxable income above RM1 million from 2027. Taxpayers in the RM1,000,001 to RM2,000,000 band, previously at 28%, could face up to RM20,000 in extra tax.
Do I pay tax on dividends from Bursa Malaysia shares?
From YA2025, individuals pay 2% tax on Malaysian dividend income above RM100,000 a year. Individuals pay no capital gains tax on shares listed on Bursa Malaysia.
Source: View Original Article — The content is based on the original publisher. Refer to the original content for accurate info. Contact us for any changes.
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Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
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