Baker Tilly Calls Budget 2027 Business-Friendly but Urges Broader Tax Reform

Kuala Lumpur, 22 October 2026 – Malaysia’s Budget 2027 strikes a balance between fiscal consolidation and targeted support for households and businesses, but more comprehensive tax reform remains necessary to strengthen government revenue, according to Anand Chelliah, Managing Partner of Tax Services at Baker Tilly Malaysia. Speaking at the Baker Tilly–Affin Bank Tax & Budget Seminar 2027, he highlighted the government’s target to reduce the fiscal deficit from 3.6% of gross domestic product (GDP) in 2026 to 3.3% in 2027.

For Malaysian businesses and investors, the budget offers targeted relief for middle-income taxpayers and micro, small and medium enterprises (MSMEs), alongside incentives intended to encourage higher-value investment in digitalisation and green activities. However, Chelliah cautioned that Malaysia’s tax revenue relative to GDP remains a concern, raising questions about whether the existing tax structure can adequately support the country’s longer-term fiscal needs.