KUALA LUMPUR, Oct 9 (Bernama) -- Budget 2027 is expected to channel savings from targeted subsidy reforms and stronger revenue collection back to the rakyat and businesses while maintaining fiscal discipline, said PwC Malaysia.
PwC Malaysia tax leader Steve Chia said the additional revenue would help fund tax cuts, even as fuel subsidies are expected to remain high at RM40 billion amid ongoing geopolitical uncertainties.
“Federal revenue for 2026 is now projected at RM363.6 billion, RM20.5 billion above the original estimate of RM343.1 billion and is expected to rise further to RM380.8 billion in 2027. Therefore, I welcome the progressive design of these measures. Relief goes mainly to the middle-income and small and medium enterprises (SME) segments, while the tax rate for individuals earning above RM1 million is adjusted to 30 per cent,” he said in a statement today.
He said the standout measure of the budget is the enhanced Global Services Hub incentive, which offers a five per cent special tax rate for up to 30 years, three times the current maximum, or twice what the Johor-Singapore Special Economic Zone (JS-SEZ) equivalent offers. “This gives groups the long-term certainty to locate regional headquarters, shared services, and treasury centres in Malaysia,” he added.
Meanwhile, Wong & Partners described Budget 2027 as broadly pro-investment and pro-productivity, with the strongest direct tax benefits directed at micro, small and medium enterprises (MSMEs), strategic investors and companies investing in automation, digitalisation and green assets. The law firm said allowing manufacturers to reclaim sales tax paid on machinery, spare parts and equipment acquired from local traders or distributors is one significant proposal of Budget 2027.
“This sales tax refund facility will also include raw materials used to manufacture pharmaceuticals, animal feed, fertilisers and pesticides. This proposal will help reduce the ‘cascading’ effect of sales tax within the supply chains and encourage purchases to be made from local distributors and businesses,” it said.
-- BERNAMA