Budget 2026 Malaysia
Budget 2026 is the fourth in the series of MADANI Budgets, advancing the vision of Ekonomi MADANI — to restore fiscal resilience, strengthen economic foundations, and uplift the dignity and livelihoods of the rakyat. Anchored on the three pillars of Ekonomi MADANI — Raising the Ceiling of national growth, Raising the Floor of living standards, and Driving Reform through good governance — this Budget continues Malaysia’s journey toward a more equitable, sustainable, and competitive economy. With the earlier MADANI Budgets having laid strong foundations, Budget 2026 builds on this momentum. It also marks a key milestone as the first Budget under the 13th Malaysia Plan (13MP) 2026–2030, reaffirming Malaysia’s long-term commitment to inclusive prosperity and reform.
💡 What does Budget 2026 mean for SMEs?
Get the latest insights, expert analyses, and event updates from YYC’s exclusive Budget 2026 coverage — your trusted source for practical, business-focused interpretations of Malaysia’s fiscal direction.
YYC Budget Newsletter
Get ready for the proposed Budget 2026 Malaysia Madani Economy on October 10! Download YYC’s exclusive newsletter – your comprehensive guide to the key Malaysia tax proposals and grants of the proposed Budget 2026.
Budget Newsletter
(English Version)
Budget Newsletter
(Chinese Version)
YYC Facebook Live: Budget 2026 Malaysia (Belanjawan 2026) Analysis with Datin Shin & Tax Experts
Stay tuned to YYC’s Facebook page on October 10 at 9 PM, where Datin Shin, CEO and Finance Expert of YYC, along with YYC’s tax directors and experts, will bring you an early analysis of the Budget 2026 Malaysia, breaking down key highlights, Malaysia tax reforms, and financial strategies right after the budget announcement!
Budget 2025 Malaysia: Quick Review for New and Existing Tax Highlights
Capital Gains Tax (CGT)
In Budget 2025 Malaysia, there are no new announcements of additional capital gains tax (CGT) introductions. However, it builds on the Capital Gains Tax framework established in Budget 2024, which focused on the disposal of unlisted shares. The tax rate remains at 10% on the adjusted income or 2% of gross proceeds, applicable from March 2024 onwards. Exemptions were granted for corporate restructuring and IPO transactions under certain conditions.
Stamp Duty Malaysia
In Budget 2025 Malaysia, significant updates have been made regarding stamp duty. A major highlight is the introduction of a self-assessment system for stamp duty, which will be implemented in phases starting from January 1, 2026. This system aims to streamline the stamp duty process, making it easier for businesses and individuals to assess and pay the applicable duties themselves. Additionally, a key update concerning stamp duty is the introduction of full stamp duty exemptions for loan or financing agreements under the Micro Finance Scheme for Micro, Small, and Medium Enterprises (MSMEs). This exemption will apply to loans or financing agreements up to RM100,000, which aims to support MSMEs by providing them with easier access to capital at more affordable terms. These updates are part of the broader effort to modernize and simplify the tax and duty systems under the Madani Economy framework.
Corporate Tax Deductions and Tax Incentives
Employers Implementing Flexible Working Arrangements: A 50% further deduction will be provided on expenses related to capacity building and software acquisition for employers offering flexible working arrangements. Employers Providing Caregiving Leave Benefit: A 50% further deduction will be given to employers offering up to 12 months of paid leave for employees caring for children or disabled family members. Tax Incentive for Women Returning to the Workforce: Employers can claim a 50% further deduction on employment expenses paid to women returning to work after a career break, to increase their participation in the workforce. Tax Incentive for Structured Internship Programmes: The existing double deduction for companies implementing structured internship programmes will be extended for another 5 years (YA 2026 to YA 2030). Special Tax Incentives for Forest City Financial Zone and East Coast Economic Region: Special tax incentives have been introduced to attract investments in these areas.
Personal Tax Reliefs
Private Retirement Scheme (PRS) & Deferred Annuity Contributions: Tax relief up to RM3,000 extended until YA 2030. Education and Medical Insurance: The relief limit has been raised from RM3,000 to RM4,000. Medical Expenses: Expanded coverage includes co-payments and vaccinations, with an increased relief limit of RM10,000, covering elderly grandparents. Childcare Center Fees: Relief increased from RM3,000 to RM4,000, easing financial burdens on parents. First-Time Homebuyer Relief: An income tax relief for first-time homebuyers allows for deductions on housing loan interest up to RM7,000 for homes priced below RM500,000 and RM5,000 for homes valued between RM500,000 and RM750,000. This applies to sales agreements signed from January 1, 2025, through December 31, 2027. The reinstated tax relief on interest expenses for housing loans provides relief for the M40 group.
Dividend Tax Malaysia
A 2% tax is introduced on dividend income exceeding RM100,000 annually, excluding some foreign and tax-exempt sources.
Excise Duty Rate on Sugar-Sweetened Beverages
To promote public health, the excise tax on sugar-sweetened beverages is set to increase in 2025, with phased increments designed to combat obesity and diabetes.
Sales and Service Tax (SST) Expansion
In Budget 2025 Malaysia, significant changes were made to the Sales and Service Tax (SST). Starting May 1, 2025, the scope of SST will expand to include new sectors and non-essential goods: Expansion to Non-Essential Items: Sales tax will be applied to premium imported items like salmon and avocado, which were previously exempted. However, basic food items will remain exempt from the sales tax, ensuring that essential goods remain affordable for the general public. Service Tax Expansion: The service tax will now cover business-to-business (B2B) transactions for commercial services, which were not previously subject to SST. This includes financial and professional services, potentially increasing the tax burden for certain industries . The government is still engaging with industry stakeholders to finalize the exact scope of the SST expansion before implementation. This move aims to broaden Malaysia’s tax base, contributing to the country’s fiscal sustainability under the Madani Economy framework.
Implementation of e-invoicing
The phased implementation of e-invoicing, as introduced in Budget 2024, will begin in August 2024 for companies with an annual turnover exceeding RM100 million. By January 2025, it will extend to companies with a turnover between RM25 million and RM100 million, and by July 2025, it will cover all other businesses.. To support this initiative, Budget 2025 announced tax incentives for the implementation of e-invoicing. Companies investing in e-invoicing systems will qualify for accelerated capital allowances, fully claimable over two years. This includes the purchase of ICT equipment, computer software packages, and consulting fees, with the allowance period reduced from three years to two years. The e-invoicing system aims to enhance transparency, improve real-time tax reporting, and reduce tax evasion, aligning with the government’s efforts to modernize tax compliance and improve operational efficiency.
Budget 2025 Malaysia: Latest Insights
Webinar Event: Key Highlights of Budget 2026 Malaysia Madani Every Business Owner Must Know
What are the highlights of the Budget 2026? Understand the latest proposed national budget 2026 policy and how it can benefit you and your business in terms of Malaysia tax planning in the year 2026. Datin Shin Yap and Zen Chow will guide you through essential tax reforms, tax incentives, and support measures, offering valuable insights for businesses of all sizes.
Join the webinar now! FREE entry for the FIRST 300 registrations! Sign up now to prepare your business for success under Budget 2026.
Public Opinion: Expectations for Budget 2025 (Hide)
What Changes Will Budget 2025 Malaysia Bring? Tax Reductions? e-invoicing Updates?
As Budget 2025 Malaysia Madani approaches, what are your expectations? Will we see new tax reductions, updates to e-invoicing, or other significant changes? Watch this video to hear public opinions and insights on what people hope to see in the upcoming budget announcement. Stay informed and join the conversation!