Higher Tax Relief Means More Take-home Pay For M40 From January

KUALA LUMPUR, Oct 20 (Bernama) -- The raising of individual tax relief to RM12,000 from RM9,000 under Budget 2027 will mean lower monthly tax deductions for taxpayers from January next year.

Economic Adviser to the Prime Minister’s Office Nurhisham Hussein said the measure would deliver immediate benefits, especially to middle-income (M40) earners, as the higher relief would be reflected in their monthly salary deductions.

"The personal relief, which hasn't been changed for 20 years — I think that's been positive. Actually, that's one of the things that the government has been able to do over the last three years, to fix a lot of the issues that have accumulated. 

“I mean, civil service salaries have not been adjusted for like 15 years; it was done last year. Pensions, shift to EPF (Employees Provident Fund), which is a major reform,” he said during the Ngopi Dengan Zafrul podcast.

Commenting on Budget 2027, Nurhisham said the government remains focused on balancing fiscal consolidation with efforts to ease the cost-of-living burden amid global uncertainties such as the war in Ukraine and the conflict in West Asia, while also addressing the needs of small and medium enterprises (SMEs).

He said public response to the budget had generally been positive, particularly the expansion of Sumbangan Asas Rahmah (SARA) to cover more essential goods, including fresh produce and chicken.

Nurhisham added that reforms for p-hailing workers were being considered for next year to strengthen regulation, improve worker protection and ensure minimum income levels.

On government spending, he said the Pantau unit under the Prime Minister's Department monitors ministries' spending against key performance indicators, identifies underutilised allocations and helps resolve implementation issues.

He said excessive spending could also trigger scrutiny, as the government sought to ensure allocations were used effectively.

Meanwhile, Malaysian Investment Development Authority (MIDA) chairman Tengku Datuk Seri Zafrul Abdul Aziz, who hosted the podcast, described Budget 2027 as people-friendly and aimed at balancing assistance for the people.

He said responsible fiscal management was crucial as excessive spending could undermine market confidence and carry political consequences. 

“If you make fiscally irresponsible decisions, the market will penalise you, and there will also be political consequences. We have seen leaders around the world face repercussions for being irresponsible with public finances,” the former Investment, Trade & Industry, and Finance Minister said.

Tengku Zafrul also stressed that effective implementation and communication were key to ensuring the budget delivered its promised benefits, adding that the government needs to demonstrate tangible results to build public confidence in its policies.

Former Bangi MP Ong Kian Ming also featured in the first episode of the podcast "Budget 2027: Boleh Deliver Ke?", uploaded to YouTube.

-- BERNAMA