KUALA LUMPUR – The government has ramped up its total spending and investment to RM510 billion under Budget 2027, up from RM470 billion previously, unveiling a series of measures aimed at easing household expenses, raising wages and supporting businesses.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim tabled the budget in the Dewan Rakyat today, outlining initiatives spanning personal taxation, employment, sports, entrepreneurship, Islamic affairs and public transport.
Among the key measures are an increase in the minimum wage to RM2,000 a month, expanded tax relief for middle-income earners and new travel concessions for public transport users.
Here are seven key highlights of Budget 2027.
Wider tax relief for the M40
1 – Middle-income earners will be able to claim tax relief on a broader range of expenses, including postnatal care, children’s tuition fees, sports shoes, artificial intelligence (AI) subscriptions and pet adoption.
The individual tax relief limit, unchanged since 2010, will be raised from RM9,000 to RM12,000.
The government will also cut individual income tax rates by one percentage point for selected chargeable income brackets.
Those earning between RM70,000 and RM100,000 will see their tax rate reduced to 18%, while the rate for the RM100,000 to RM150,000 bracket will fall to 24%.
Minimum wage to rise to RM2,000
2 – More than four million workers are expected to benefit from an increase in the minimum monthly wage from RM1,700 to RM2,000, effective June 2027.
Micro, small and medium enterprises (MSMEs) with annual sales revenue below RM50 million will initially be exempted from the increase to give them time to adjust their business models.
The government will also introduce a minimum monthly wage of RM2,500 for semi-skilled workers and graduates, addressing concerns over whether employees are being paid in line with their qualifications.
RM730 million for SEA Games and sports development
3 – A total of RM730 million has been allocated for preparations for the 2027 SEA Games and ASEAN Para Games, alongside broader national sports development programmes.
Of the allocation, RM240 million will fund preparations to host the competitions, while RM460 million will support high-performance sports programmes, the Road to Gold initiative, para athletes, deaf sports and the upkeep of sports facilities nationwide.
A further RM30 million will be channelled through a sports matching grant to encourage sports associations, clubs and non-governmental organisations (NGOs) to organise high-performance sporting events.
RM160 million package for e-hailing and p-hailing workers
4 – The government and Grab will jointly finance a RM160 million package from 2027 to improve the earnings and welfare of e-hailing drivers and p-hailing delivery riders.
The package will include measures to raise minimum earnings, provide assistance for vehicle maintenance and insurance, and support contributions to the Social Security Organisation (Socso).
The initiative is expected to increase median net monthly income by up to RM227 for e-hailing drivers and RM100 for p-hailing riders.
RM300 million for financing the Indian entrepreneurs and welfare of Indian Youths
5 – Indian entrepreneurs will have access to RM150 million in financing through TEKUN Nasional and Amanah Ikhtiar Malaysia (AIM), with the aim of improving access to capital and helping small business owners expand their operations.
Separately, the allocation for the Malaysian Indian Transformation Unit (MITRA) has been increased to RM150 million to support the welfare of Indian youths.
Islamic affairs allocation rises to RM3.1 billion
6 – The government has increased funding for Islamic affairs to RM3.1 billion from RM2.6 billion previously, with the additional allocation intended to strengthen religious institutions and education.
The Malaysian Islamic Development Department (Jakim) will work with the Malaysia Digital Economy Corporation (MDEC) to provide devices and digital skills training for teachers and students at more than 300 pondok schools nationwide.
A Creative Dakwah Programme will also be introduced to produce engaging Islamic content for younger audiences using digital media, social media influencers and AI.
Meanwhile, 500 Kelas Al-Quran dan Fardu Ain (KAFA) teachers who teach pupils with special needs will receive a monthly incentive of RM150.
The government will also cover Socso contributions for 40,000 religious personnel through Lembaga Tabung Haji
RM3.4 billion rail recovery programme and new travel passes
7 – Prasarana Malaysia Bhd will invest more than RM3.4 billion in a comprehensive rail service recovery programme, while the government will acquire 42 new train sets for Electric Train Service (ETS) and KTM Komuter services.
The My50 unlimited travel pass will continue to benefit 300,000 Prasarana bus and rail users in the Klang Valley.
A new MyKomuter50 pass will also be introduced for 40,000 KTM Komuter passengers, offering potential savings averaging up to RM160 a month.
Free travel passes will also be provided to 360,000 school students, persons with disabilities (OKU) and children below six years old. – October 9, 2026