The government will increase support for micro, small and medium enterprises (MSMEs) to RM6.6 billion under Budget 2027, while reducing the applicable income tax rate for eligible businesses by one percentage point, as Putrajaya moves to ease operating costs and strengthen domestic enterprises.
Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim, announcing the measures while tabling Budget 2027 in Parliament today, positioned MSMEs as a key part of the government’s strategy to strengthen domestic economic activity and help local businesses scale up.
The RM6.6 billion support is expected to widen access to financing and other assistance for micro and small businesses, which continue to face pressures from higher wages, financing costs and other operating expenses.
The one-percentage-point reduction in the tax rate for eligible MSMEs is meanwhile intended to allow smaller companies to retain a larger share of their earnings for working capital, investment and business expansion.
Further details on the chargeable-income band affected by the reduction, eligibility requirements and the year of assessment from which the revised tax rate will take effect are expected to be set out in the Budget 2027 tax measures.
