KUALA LUMPUR: The government will reduce income tax rates for micro, small and medium enterprises (MSMEs) by one percentage point under Budget 2027 to help ease rising operating costs.
Prime Minister Anwar Ibrahim said the move was aimed at supporting businesses that contribute about 40% of the country’s economy and employ approximately eight million people, or half of Malaysia’s workforce.
Under the proposed changes, the tax rate for the first RM150,000 in chargeable income will be reduced to 14% from 15%.
Meanwhile, the rate for chargeable income exceeding RM150,000 up to RM600,000 will be lowered to 16%.
Anwar said the tax reductions would provide additional income of up to RM6,000 for about 300,000 MSMEs.
Higher capital allowance threshold
The government has also proposed increasing the qualifying threshold for individual low-value assets eligible for capital allowances to RM3,000.
For companies that are not classified as MSMEs, the overall limit for such claims will be raised to RM30,000.
The measures are intended to reduce the tax burden on smaller businesses, improve cash flow and help companies manage rising operating expenses while supporting business growth.
Source – SCREEN GRAB RTM NEWS
