KUALA LUMPUR: The individual income tax relief limit has been raised to RM12,000 from the previous rate of RM9,000, which was last reviewed in 2010.
Prime Minister Datuk Seri Anwar Ibrahim said the resident individual income tax rate had also been reduced by one percentage point.
Anwar, who is also Finance Minister, said individual tax relief had been expanded to cover medical treatment, including postnatal care services.
"Care for parents and grandparents has been expanded to cover all care expenses and is no longer restricted to medical health, while sports equipment now includes the purchase of sports shoes.
"Course and skills training fees have been expanded to cover all fields of study and children's tuition fees. In addition, lifestyle relief now encompasses Artificial Intelligence (AI) subscriptions, vaccination costs and pet adoptions from registered centres," he said when tabling Budget 2027, themed "Malaysia Madani: Reaching for the Sky, Rooted in the Ground", in the Dewan Rakyat on Friday (Oct 9).
Anwar said these measures were taken because the government listened to the concerns of the middle-income (M40) group, who have remained resilient despite cost-of-living pressures.
He also announced that the tax rate for taxable income between RM70,000 and RM100,000 had been reduced to 18%, while the rate for the RM100,000 to RM150,000 band was cut to 24%.
"At the same time, the government is adopting a progressive approach, adjusting the tax rate r high earners with income exceeding RM1mil to 30%," he said.
The Prime Minister said the higher tax relief and reduced individual tax rates would yield up to RM1,600 in extra disposable income for about five million taxpayers. – Bernama
