The upcoming Budget 2027 announcement on Oct 9 should focus on strengthening investment, productivity and business transformation, while providing greater tax certainty and carefully assessing whether Goods and Services Tax (GST), including a possible GST-Sales and Services Tax hybrid (GST), should return, Ernst & Young Consulting Sdn Bhd Malaysia Tax Managing Partner Farah Rosley said.
For Budget 2027, EY’s key recommendation is to focus on measures that enhance Malaysia’s long-term competitiveness while maintaining fiscal sustainability. The priority should be on creating an ecosystem that attracts quality investments, drives productivity and supports business transformation.
Our “wish list” includes:
- Stronger incentives for digitalisation and innovation, particularly in areas such as artificial intelligence, automation, cybersecurity, and research and development (R&D), to help businesses improve productivity and move up the value chain.
- Enhanced support for talent development, including tax incentives and grants for upskilling and reskilling initiatives, to help build the skilled workforce needed for a high-value, knowledge-based economy.
- Accelerated sustainability measures, with targeted incentives for renewable energy, energy efficiency, carbon management and ESG-related investments to support Malaysia’s low-carbon transition and attract sustainable investments.
- Introduction of incentives which will continue to be beneficial to groups which are impacted by the Organisation for Economic Co-operation and Development’s Global Minimum Tax initiative.
- Greater investment facilitation, including simplified and outcome-based tax incentives, regulatory efficiency, and continued efforts to improve the ease of doing business.
- A stable and predictable tax environment, supported by clear policy direction and stakeholder engagement, which remains critical for investor confidence and long-term business planning.
- Introduction of the GST or whether a hybrid approach involving both GST and SST could be considered. Careful evaluation is needed so as not to create disruption to the economy. The clarity of the tax measures as well as sufficient lead time for businesses is crucial. It is also important to ensure the consistency of policies and measures that is being implemented will bring the intended outcome that Malaysia aims to achieve.
Ultimately, Budget 2027 presents an opportunity to reinforce Malaysia’s position as a competitive investment destination by balancing fiscal responsibility with growth-oriented policies that encourage innovation, investment and sustainable economic development.
