Prime Minister Datuk Seri Anwar Ibrahim has announced a reduction in income tax rates for micro, small and medium enterprises (MSMEs) under Budget 2027.
Under the proposed changes, the income tax rate for MSMEs will be reduced by one percentage point for two chargeable income brackets.
The rate will fall to 14% for the first RM150,000 in chargeable income, while income between RM150,001 and RM600,000 will be taxed at 16%.
The measures are aimed at easing the tax burden on smaller businesses and supporting their financial sustainability amid operating costs and wider economic challenges.
The announcement forms part of the government’s Budget 2027 measures to support businesses and strengthen the MSME sector.
