The Malaysian Institute of Accountants (MIA) has welcomed Budget 2027’s tax reforms, including lower income tax rates for individuals and small businesses, saying the measures will help ease cost-of-living pressures, strengthen business competitiveness and promote greater tax fairness.
MIA Vice President Ahmad Syahazan Yaacob said several key tax measures proposed by the institute had been incorporated into the national budget, reflecting the importance of balancing household affordability, fiscal sustainability and changing economic conditions.
“Budget 2027’s adjustments to individual income tax bands and a review of personal tax reliefs better reflect rising living costs and family commitments. These measures can help improve tax fairness and provide greater support to taxpayers, particularly lower- and middle-income earners,” he said.
Among the key changes is a reduction in the individual income tax rate to 18% for chargeable income between RM70,001 and RM100,000, alongside the introduction of a new 24% tax bracket for chargeable income between RM100,001 and RM150,000.
Individuals with chargeable income exceeding RM1 million will be taxed at 30%, while the personal tax relief limit will increase from RM9,000 to RM12,000.
Ahmad Syahazan said the inclusion of these measures highlighted the benefits of constructive engagement between the accountancy profession and policymakers.
300,000 Small Businesses To Benefit From Lower Taxes
MIA also welcomed the reduction in income tax rates for micro, small and medium enterprises (MSMEs), which is expected to benefit approximately 300,000 businesses.
Under Budget 2027, the tax rate on the first RM150,000 of chargeable income will be reduced by one percentage point to 14%, while income between RM150,001 and RM600,000 will be taxed at 16%.
The measures are expected to provide tax savings of up to RM6,000 for eligible businesses, including small and medium accounting practices.
Ahmad Syahazan said the incentives, together with financing facilities and support for digitalisation, artificial intelligence (AI) adoption and export development, would help SMEs strengthen their competitiveness and financial resilience.
“Beyond providing tax savings and financial support, these measures can help strengthen SME competitiveness, accelerate business transformation and support long-term growth,” he said.
He added that small and medium accounting practitioners would play an important role in helping businesses navigate financing opportunities, digital transformation and sustainability requirements.
Stronger Oversight Of Public Funds Essential To Restore Trust
Beyond taxation, MIA welcomed Budget 2027’s emphasis on strengthening governance, accountability and transparency in public financial management.
The proposed Government-Owned Entities Bill, aimed at enhancing oversight of government-linked companies and statutory bodies, was among the measures highlighted by the institute.
Other initiatives include tighter controls to ensure loan repayments and related interest income collected by federal statutory bodies are used only for approved purposes.
MIA Chief Executive Officer G Shanmugam said effective governance depended not only on regulations but also on clear accountability, disciplined financial management and reliable information.
“Measures that strengthen controls over public funds and enhance the governance of government-owned entities are important steps towards reinforcing public trust and accountability,” he said.
He emphasised that professional accountants have a continuing responsibility to safeguard the integrity of financial information and support sound decision-making.
Enhanced Tax Incentives To Attract Global Services Investments
MIA also highlighted enhanced Global Services Hub (GSH) tax incentives, which will take effect on January 1, 2027, to strengthen Malaysia’s competitiveness in high-value services.
New companies undertaking qualifying GSH activities will be eligible for a preferential income tax rate of 5%, while existing Principal Hub or GSH companies can enjoy the same rate on income exceeding a prescribed baseline.
The incentive period will also be extended by five years per extension, up to a maximum of 30 years.
Additional withholding tax and stamp duty exemptions will apply to qualifying treasury and fund management activities, including those under the Johor-Singapore Special Economic Zone incentive package.
The measures are intended to encourage higher-value business activities and strengthen Malaysia’s position as a regional services hub.
AI, Sustainability Spending To Create New Opportunities For Accountants
MIA said Budget 2027’s continued focus on AI adoption, digitalisation and sustainable development would create new opportunities for the accountancy profession.
The government has allocated nearly RM15 million to AI Malaysia Berhad to strengthen the country’s safe and ethical AI ecosystem, supporting the ambition of developing 200,000 AI professionals.
Meanwhile, the Malaysia Digital Economy Corporation (MDEC) will receive RM30 million to help 4,000 MSMEs adopt AI and automation while training and certifying 5,000 AI professionals.
The expansion of lifestyle tax relief to include AI subscription fees is also expected to encourage wider adoption of AI tools.
Ahmad Syahazan said accountants could support responsible AI implementation through their expertise in risk management, internal controls, assurance and professional ethics.
“While AI presents significant opportunities to enhance productivity, efficiency and innovation, its adoption must be accompanied by appropriate governance, ethical safeguards and accountability,” he said.
On sustainability, MIA welcomed the RM1 billion Climate Fund managed by Kumpulan Wang Persaraan (Diperbadankan) (KWAP), RM2.5 billion for water infrastructure programmes and RM1.5 billion for solar park development across government buildings.
Shanmugam said these investments would increase demand for expertise in sustainability reporting, environmental, social and governance (ESG) performance measurement, green financing and carbon accounting.
The institute also welcomed tax incentives supporting Islamic finance, including deductions for Prisma Sukuk issuance costs from assessment years 2027 to 2030 and income tax exemptions for Sustainable and Responsible Investment (SRI) Sukuk and Bond Grants from January 1, 2027.
MIA said accountants would have an important role in strengthening financial reporting, impact measurement and transparency across these financing activities.
Upskilling Critical As Accountancy Profession Evolves
The institute further welcomed Budget 2027’s allocations for higher education, research commercialisation and professional development.
These include the establishment of a RM50 million UniVC Fund to commercialise university research, alongside RM6 billion allocated across ministries to strengthen research and innovation.
MIA said continued investment in upskilling, reskilling and professional development through initiatives involving HRD Corp and other skills development programmes would be essential as accounting practices increasingly adopt digital technologies and AI.
It stressed that accountants must continuously develop technical competencies, digital capabilities and sustainability expertise to meet changing business expectations.
Overall, MIA said Budget 2027’s combination of tax reforms, stronger governance measures and investments in technology and human capital would help build a more competitive business environment while positioning the accountancy profession to support Malaysia’s long-term economic transformation.
