Soh Lian Seng
Head of tax at KPMG in Malaysia
President of the Chartered Tax Institute Of Malaysia
Budget 2026 signals a shift in Malaysia’s fiscal philosophy: from broad-based stimulus to targeted empowerment, from reactive subsidies to proactive inclusion, and from short-term relief to long-term resilience.
Measures such as the expanded Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (Sara) cash aid for over nine million recipients, increase in childcare relief to RM3,000 and extension to include children up to 12 years of age as well as learning disability relief raised to RM10,000 to support families with children facing developmental challenges, reflect a budget that listens to the rakyat’s evolving needs whether it’s working parents, ageing households, or families navigating healthcare costs. Beyond its social focus, Budget 2026 introduces strategic tax reforms that modernise Malaysia’s fiscal framework and align it with global best practices.
Meanwhile, limited liability partnership profit distributions above RM100,000, now taxable at 2%, ensure high-income earners contribute equitably. Doubling of stamp duty on foreign property buyers to 8% reinforces housing affordability for locals.
These reforms reflect a calibrated approach — protecting small-medium enterprises and the middle class while ensuring high-income earners and foreign entities contribute their fair share.
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Sim Kwang Gek
Tax and legal leader
Deloitte Malaysia
There are no increases in the amount of tax reliefs except for the tax relief granted for expenses incurred in early intervention programmes and rehabilitation treatment for children with learning disabilities, where the threshold will increase from RM6,000 to RM10,000. However, do take note that the total amount of individual income tax relief given on various medical treatment expenses for self, husband/wife or children is still maintained at RM10,000.
In line with the Visit Malaysia Year in 2026, the government has proposed a number of tax incentives to boost this sector. The tax deduction granted for qualifying capital expenditure incurred up to RM500,000 for renovation and refurbishment costs, as well as the income tax exemption on the increased income generated from tourism packages into Malaysia are good proposals, and we expect detailed guidelines to be issued to assist companies in making these claims.
For individuals, a tax relief of RM1,000 is proposed to be given for entrance fees to local tourism centres and cultural programmes. This is a welcomed measure and will help stimulate local tourism, but note that the tax relief is only given for entrance fees and hence, it is more restrictive compared to a similar relief that was given back in year 2020 as part of the Economic Stimulus Package to assist the tourism industry recover from the Covid-19 pandemic.
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Farah Rosley
Malaysia managing tax partner
Ernst & Young Tax Consultants Sdn Bhd
It is expected that the carbon tax will initially be introduced at a low rate, to avoid inflationary impact and to allow monitoring and refinement of the implementation.
In support of Malaysia’s broader climate ambitions, Budget 2026 also introduced a targeted suite of other sustainability-linked measures. These include the continuation of the Green Technology Financing Scheme (GTFS 5.0) with RM1 billion in financing, and government guarantees of up to 80% for waste sector projects and 60% for other green sectors such as energy, water, transport, and manufacturing.
The budget also reinforces the National Energy Transition Roadmap (NETR) through allocations for solar projects under the Large-Scale Solar (LSS 6) programme (nearly 2GW capacity), the Corporate Renewable Energy Scheme (CRESS) (expected to generate RM3.5 billion in investment), and an additional 300MW quota under the Feed-in Tariff programme for biogas, biomass, and small hydro.
To promote sustainable consumption, the government expanded the RM2,500 individual tax relief to include food waste shredders, and allocated RM250 million under the Ecological Fiscal Transfer (EFT) to support state-level conservation efforts.
These measures reflect a strategic shift towards embedding sustainability into Malaysia’s fiscal and industrial frameworks as well as the day-to-day lives of Malaysians.
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Steve Chia
Tax leader
PwC Malaysia
Budget 2026 extends the stamp duty exemption on instruments of transfer for residential property and on loan instruments for first-time homebuyers purchasing properties valued up to RM500,000 for a further two years, until Dec 31, 2027. This continued relief supports Malaysians aspiring to own their first home. The measure to increase the stamp duty rate on instruments for transfer of residential property for non-citizens, non-permanent residents, and foreign companies from 4% to 8% is also consistent with the government’s focus on the rakyat’s welfare by curbing speculative activity in the property market.
One measure that did pique my interest is the proposal to grant special tax deduction equivalent to 10% of the cost of renovation and conversion of commercial properties into residential properties, capped at RM10 million. This measure looks intended to encourage adaptive reuse and may signal recognition of a relative supply imbalance between the commercial and residential sectors.
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YYC Advisors
This year’s RM470 billion national budget, the largest in Malaysia’s history, focuses on stability and business support. While it introduces no dramatic reforms, it gives entrepreneurs room to breathe, refocus, and rebuild.
Five key areas that directly impact Malaysian small and medium enterprises (SMEs) include cash flow for the segment, with the government expanding the Syarikat Jaminan Pembiayaan Perniagaan (SJPP) guarantee ceiling to RM30 billion, including RM5 billion specifically for exporters. This allows SMEs with limited collateral to access loans more easily, as the government will guarantee up to 70% of their financing — helping more entrepreneurs overcome cash flow bottlenecks. Other financial support includes RM2.5 billion in microloans via Bank Simpanan Nasional and Tekun Nasional, RM50 million in cooperative financing, and RM500 million in soft loans through EXIM Bank for export-related businesses.
Other measures are to encourage export growth (Khazanah Nasional Bhd, Retirement Fund Inc or KWAP, and Bank Pembangunan Malaysia Bhd will invest over RM1 billion into Malaysia’s semiconductor and electronics industry, reinforcing the country’s position in global value chains), and reviving tourism by way of Putrajaya investing over RM700 million to attract tourists and boost local travel ahead of Visit Malaysia Year 2026. The government is also building a future-ready workforce by reinforcing with two landmark investments — Microsoft’s US$2.2 billion (RM9.3 billion) investment to establish the West Malaysia Cloud Region and train 800,000 Malaysians through its AI for Malaysia’s Future programme; and Google’s US$2 billion investment to build a data centre and Google Cloud region in Selangor.
Lastly, there will be no further expansion of the sales and service tax (SST) which comes as a relief for SMEs already adjusting to the broader SST scope introduced in mid-2025. Instead, the government is moving forward with digital tax administration to make compliance easier and faster such as with the e-invoice system.