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Budget 2027
Reading the Budget as an SME — 2027 edition
What Malaysia's Budget 2027 means for small businesses: the money you can apply for, the tax you keep, the costs that change, and how it compares with 2026 — every figure tied to the speech.
Budget 2027 was tabled on 9 October 2026. This edition sorts its SME measures the same way every year: what you can apply for, what you keep, what costs you more, and what is aimed at someone else. Each figure carries its paragraph number (¶) in the official speech, so you can check it or show it to your bank or agency.
New to reading a Budget? The method, with a full worked example and what happened during the year, is in the 2026 edition.
The method in brief
- Read the speech, not just the headlines — belanjawan.mof.gov.my.
- Find the business parts. In Budget 2027 the core SME paragraphs are 127 to 141, with more under wages (32–34), halal (73), Bumiputera businesses (69–72), agriculture (115–119), digital (136, 157) and training (153–157).
- Sort each measure into: money you can apply for, money you keep, costs that change, programmes for others.
- Separate big totals from specific schemes. "RM57 billion in loans and guarantees" is an umbrella; "RM60 million for MATRADE" is a scheme.
- Find the channel and the date for each measure that fits: the agency, who it is for, when it opens.
- Follow it through the year. Last year the biggest changes to SME financing came six months after the speech.
The headline for SMEs
Total loan facilities and financing guarantees rise from RM50 billion to RM57 billion (¶135). The SME income tax rate is cut by one percentage point (¶127). The minimum wage rises to RM2,000 from June 2027, with an exemption for MSMEs with annual sales below RM50 million (¶32).
Money you can apply for
Financing and guarantees
| Measure | Amount in the speech | Runs it | ¶ |
|---|---|---|---|
| Financing guarantees, incl. mid-tier firms in all sectors | Up to RM32 billion | SJPP and CGC | 134 |
| SJPP guarantee limit for mid-tier companies | Raised to RM50 million | SJPP | 134 |
| Guarantees for growth through mergers and acquisitions | RM1 billion | SJPP | 134 |
| Bank Negara facility for SMEs affected by the West Asia conflict | A further RM5 billion, on top of RM5 billion already available | Bank Negara Malaysia | 132 |
| Financing for seven strategic sectors | RM7 billion | BPMB Group | 133 |
| Export financing for MSMEs entering export markets | RM1 billion | BPMB | 136 |
| Microfinancing, total (the lines below are the parts the speech names) | RM6.6 billion | AIM, TEKUN, BSN | 130 |
| — AIM | RM3 billion, 360,000 entrepreneurs | Amanah Ikhtiar Malaysia | 130 |
| — TEKUN financing fund | Raised to RM1.3 billion | TEKUN Nasional | 130 |
| — BSN microfinancing | RM1.7 billion | BSN | 130 |
| — Indian community entrepreneurs | Raised to RM150 million | TEKUN and AIM | 130 |
| Equity crowdfunding and P2P allocation for SMEs | RM270 million | Via SC-regulated platforms | 141 |
| Agropreneur financing | More than RM1 billion | Agrobank, Bank Rakyat, SKM | 118 |
| Bumiputera entrepreneurs (PUNB) | RM500 million (from RM350 million) | PUNB | 69 |
| Bumiputera financing (TERAJU) | Up to RM1 billion | TERAJU | 69 |
Grants and matching grants
| Measure | Amount in the speech | Runs it | ¶ |
|---|---|---|---|
| Geran Sejahtera MADANI, equipment assistance for micro-entrepreneurs (especially women) | RM200 million, 40,000 recipients | Not named in the speech | 129 |
| Halal certification matching grant for first-time MSMEs | Up to RM5,000 | Not named in the speech | 73 |
| Halal MSME grant (e.g. cosmetics, pharmaceuticals) | RM25,000 | Not named in the speech | 73 |
| Help entering new overseas markets | RM60 million | MATRADE | 136 |
| AI adoption for MSMEs, plus training 5,000 AI professionals | RM30 million, 4,000 MSMEs | MDEC | 157 |
| Online business support for young entrepreneurs | RM142 million | NADI | 136 |
| Rural products onto digital and overseas platforms (JOM MALAYSIA) | RM10 million | Not named in the speech | 136 |
| MediAsas employer premium subsidy, SMEs with fewer than 75 staff | RM200 per employee on the first-year premium, up to 50 employees | Government, from January 2027 | 86 |
| Visit Malaysia Year 2027; flight matching grant widened to cruise ships, ferries and tour buses | RM935 million for tourism and culture | Not named in the speech | 176 |
Training your team
| Measure | Amount in the speech | Runs it | ¶ |
|---|---|---|---|
| Skills training places | RM3 billion, 3 million places | HRD Corp | 155 |
| Trainee financing | RM500 million | PTPK | 155 |
| Total TVET allocation | RM8 billion | Across ministries | 155 |
Money you keep: tax
- SME income tax cut by one percentage point to 14% on the first RM150,000 and 16% on RM150,001–600,000 of chargeable income (¶127), down from 15% and 17%. Tax firms expect it to apply from year of assessment 2027 (EY).
- Small-value assets: the per-asset limit for the capital allowance rises to RM3,000 (¶128).
- Accelerated Capital Allowance on plant and machinery from local manufacturers, and on ICT and software, runs until 31 December 2030 (¶128).
- Sales tax refund on machinery, spare parts and equipment supplied to manufacturers (¶128).
- Stamp duty of RM10 on P2P loan agreements, 1 January 2027 to 31 December 2030 (¶128). The same RM10 rate applies to agreements between mid-tier companies and their banks for excess credit used to support MSME suppliers — signed by the buyer, not the SME (¶128; EY) — and to CAKNA loan and financing agreements (¶69). Opening savings and current accounts becomes fully exempt (¶128).
- Tax deduction for companies running Bakat MADANI training, 29 June 2026 to 31 December 2030 (¶154).
- Income tax exemption for individuals investing through equity crowdfunding, and for angel investors in early-stage tech startups, extended to 31 December 2030 — helpful if you raise money that way (¶141).
Tax measures are proposals until the Finance Bill is passed.
Costs that change
- Minimum wage to RM2,000 from June 2027 (from RM1,700). MSMEs with annual sales below RM50 million are exempted; the speech does not say for how long (¶32).
- Paying wages in cash: salary deductions will be allowed only for wages paid through a bank account or cashless instrument. MSMEs are exempted (¶33); tax firms report this applies from year of assessment 2028 (EY).
- e-Invoicing: no change in the Budget. Before it, the exemption threshold was raised from RM1 million to RM3 million in annual sales, effective 1 September 2026 (The Star, citing LHDN, 30 August 2026).
Compared with Budget 2026
| Line | Budget 2026 | Budget 2027 | Direction |
|---|---|---|---|
| Total loans and guarantees | RM50 billion (¶98) | RM57 billion (¶135) | Up |
| Government guarantees | SJPP RM30 billion (¶98), plus RM5 billion added in April 2026 | SJPP and CGC together, up to RM32 billion; mid-tier limit RM50 million; RM1 billion for M&A (¶134) | Wider scope; not a like-for-like increase (2027 includes CGC) |
| Microfinancing | More than RM2.5 billion, mainly BSN and TEKUN (¶98) | RM6.6 billion across AIM, TEKUN and BSN (¶130) | Up (the 2027 figure includes AIM) |
| MATRADE, new markets | RM60 million (¶96) | RM60 million (¶136) | Same |
| HRD Corp training | RM3 billion, 3 million places (¶65) | RM3 billion, 3 million places (¶155) | Same |
| TVET | RM7.9 billion (¶64) | RM8 billion (¶155) | Up |
| SME income tax | Unchanged (15% / 17%) | 14% / 16% (¶127) | Down |
| Accelerated Capital Allowance | Plant, machinery and ICT, to 31 December 2026 (tax firms; not in the speech) | Local plant and machinery, ICT and software, to 31 December 2030 (¶128) | Runs four more years |
| Minimum wage | No change in the speech | RM2,000 from June 2027; MSMEs under RM50 million sales exempt (¶32) | New cost for larger firms |
| Digital, for SMEs | Nearly RM1 billion in financing and grants for automation (¶100); RM53 million Digital Acceleration Grant (¶87); NADI RM350 million (¶100) | MDEC RM30 million for 4,000 MSMEs (¶157); NADI RM142 million (¶136) | Lower in what the speech names for SMEs |
What to do now
- Check your tax position. If your company qualifies as an SME, the one-point cut applies to year of assessment 2027. Ask your tax agent what it is worth to you.
- Plan for wages. If your annual sales are RM50 million or more, budget for the RM2,000 minimum from June 2027. If they are below, confirm the exemption's terms when the order is gazetted.
- Line up financing early. Guarantee schemes and facilities like last year's SME SRF are often first come, first served. Have your documents ready before the windows open in early 2027.
- Watch for the guidelines. The grants above become applications only when the agency publishes rules. Grant Finder adds each scheme when it opens and alerts the businesses it fits.
Sources
- Budget 2027 speech (English), Ministry of Finance: https://belanjawan.mof.gov.my/pdf/belanjawan2027/ucapan/bs27.pdf
- EY Take 5, Malaysia Budget 2027: https://www.ey.com/content/dam/ey-unified-site/ey-com/en-my/technical/take-5-business-alert/documents/ey-take-5-budget-2027.pdf
- Deloitte, Malaysia Budget 2027 snapshot: https://www.deloitte.com/southeast-asia/en/services/tax/perspectives/malaysia-budget-2027-snapshot.html
- PwC Malaysia, Budget 2027 statement: https://www.pwc.com/my/en/media/press-releases/2026/20261009-pwc-malaysia-budget-2027-statement.html
- The Edge, Highlights of Budget 2027: https://theedgemalaysia.com/node/821179
- The Star, e-invoicing threshold to RM3 million, 30 August 2026: https://thestar.com.my/news/nation/2026/08/30/over-11-million-businesses-to-benefit-from-higher-e-invoicing-threshold-says-lhdn
- Budget 2026 speech, for the comparison: https://belanjawan.mof.gov.my/pdf/belanjawan2026/ucapan/bs26.pdf
Figures are as announced in the speech. Each scheme's own guidelines decide who qualifies and how much, and tax measures depend on the Finance Bill. Always confirm with the agency before applying.