Budget 2027 Tax Measures To Support Businesses, Boost Productivity – Experts
KUALA LUMPUR, Oct 10 (Bernama) -- Budget 2027’s targeted tax measures are expected to support business competitiveness, encourage domestic investment and strengthen Malaysia’s economic resilience amid rising operating costs and global uncertainties, said tax experts.
Ernst & Young Tax Consultants Sdn Bhd Malaysia tax managing partner Farah Rosley said the budget provides relief where pressure is most immediate, particularly for lower- and middle-income households and smaller businesses.
At the same time, she said, it places greater emphasis on the foundations of long-term, sustainable growth through productivity enhancement, workforce development, technology adoption, investment attraction and stronger domestic capabilities.
"The combination of fiscal discipline, targeted support and measures to strengthen competitiveness reflects a continued shift from short-term assistance towards structural reforms aimed at building a more resilient, innovative and higher-value economy.
"Effective implementation, policy certainty and strong public-private collaboration will be critical to translating these measures into meaningful and lasting outcomes for businesses, investors and the rakyat," said Farah in a statement.
Deloitte Malaysia Tax Leader Sim Kwang Gek said the budget focuses on strengthening the country’s economic foundations and positioning Malaysia for future growth without introducing new tax reforms or taxes.
"Rather than introducing new tax reforms or new taxes, the government has adopted a targeted approach centred on strengthening competitiveness, encouraging investment, supporting productivity improvements and enhancing household resilience," she said in a statement.
Chartered Tax Institute of Malaysia (CTIM) president Alan Chung said the tax savings measures for micro, small and medium enterprises (MSMEs) would help businesses maintain financial resilience as they adjust to rising operating costs caused by inflationary pressures and higher energy prices following recent global geopolitical tensions.
He said the extension of the relief period would ease cash flow pressures arising from capital investments and encourage domestic investment activities while continuing to support local businesses.
Chung highlighted the enhanced Green Technology Tax Incentive, which introduces new qualifying activities, including ocean thermal energy conversion, and expands eligible assets to cover locally produced electric vehicle infrastructure, waste recycling systems and water conservation technologies.
He said the measures aim to reduce investment costs, encourage technology adoption, stimulate local green industries and create skilled employment.
"By promoting renewable energy, energy efficiency and domestic green technology manufacturing, Malaysia can strengthen energy security, attract sustainable investments and enhance its competitiveness in the global green economy," said Chung.
Meanwhile, Deloitte Malaysia Country Managing Partner Yee Wing Peng said the government’s efforts to reduce the fiscal deficit to 3.3 per cent of gross domestic product (GDP), while maintaining investments in economic and social development, reflected its commitment to balancing fiscal sustainability with growth.
He said continued investments in artificial intelligence (AI), digitalisation, education, talent development and strategic infrastructure would support future growth driven by innovation, productivity and human capital.
Yee stated that improving spending efficiency, enhancing governance, and strengthening the country’s fiscal position would help boost investor confidence and maintain Malaysia’s appeal as a business and investment destination.
"Taken together, the measures announced under Budget 2027 represent a balanced approach to nation-building," he said.
On household support, Deloitte Malaysia Global Employer Services leader Ang Weina said Budget 2027 aims to strengthen the financial resilience of middle-income households through tax reductions, expanded relief measures and housing-related incentives.
She said the budget places particular emphasis on supporting the "sandwich generation", with enhanced reliefs intended to ease the financial burden of caring for dependent children and ageing parents.
"Collectively, these measures reflect a balanced approach that addresses immediate cost-of-living challenges while advancing broader objectives of financial security, workforce readiness and sustainable economic growth," she said.
-- BERNAMA