Budget 2027 Lifts Minimum Wage to RM2,000 and Trims Personal Tax Rates

KUALA LUMPUR: Malaysia’s Budget 2027, tabled in Parliament on October 9, raises the minimum wage to RM2,000 a month from RM1,700 starting in June 2027, while cutting personal income tax rates for resident individuals by one percentage point and expanding relief for middle-income earners.

The government is targeting a fiscal deficit of 3.3% of gross domestic product (GDP) in 2027. Revenue is projected at RM380.8 billion, up 4.7% from the RM363.6 billion expected this year, while total spending is set at RM459.8 billion, 3.6% higher than in 2026.

Minimum Wage

Some RM72.7 billion has been set aside for subsidies and social assistance, including RM16 billion in cash aid compared with RM15 billion this year. Fuel subsidies remain large at RM40 billion.

Markets responded positively. The FBM KLCI gained 0.47% to close at 1,608.45 points on budget day, while the ringgit firmed and 10-year government bond yields eased. Business groups also welcomed the package, with the Small and Medium Enterprises Association of Malaysia (Samenta) describing it as an SME-friendly budget, citing RM57 billion in financing and guarantees, a corporate tax reduction and minimum wage exemptions for qualifying businesses.

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