Budget 2026 simplified: What Malaysians can expect in tax reliefs, cash aids and other benefits

Budget 2026 simplified: What Malaysians can expect in tax reliefs, cash aids and other benefits



Malaysians can expect some money in their wallets and savings this Budget 2026. — File picture by Miera Zulyana

Saturday, 11 Oct 2025 7:00 AM MYT


KUALA LUMPUR, Oct 11 — Do you know what you will be getting from Budget 2026? If not, here’s a look at some of the key income tax reliefs and exemptions that you can look forward to:

RM1,000 individual income tax relief on entrance fees to local tourism centres and cultural programmes to encourage local tourism. 

Here are all the other tourism-related tax measures:

• Proposed expansion of RM3,000 tax relief on nursery fees (children up to age six) to cover childcare for children (up to age 12) from 2026 tax assessment year onwards:
• RM2,500 individual income tax relief expanded to cover food composting machine;
• Proposed expansion of individual tax relief of RM3,000 for life insurance (currently for self and spouse) to cover insurance for children;
• Full stamp duty exemption on low-value insurance policies by individuals and micro, small and medium enterprises and on Perlindungan Tenang insurance extended for three years to 2028;
• Proposed expansion of tax relief for vaccination expenses to cover all type of MOH-approved vaccines;
• Import duties and sales tax on nicotine replacement therapy products continued, and expanded to nicotine mist and nicotine lozenges until December 31, 2027.

Full stamp duty exemption for first-time homebuyers on loan agreement, memorandum of transfer for up to RM500,000 first home extended for two years to December 31, 2027;

Proposed four to eight per cent stamp duties on memorandum of transfer for foreign individuals and foreign companies on houses, except for permanent residents in Malaysia

Full exemption on excise duties, sales tax for taxi drivers, private rental car owners who buy new Proton and Perodua vehicles;

Income tax deduction for cash donors for approved corruption-prevention programmes;

Tax cuts for cash donations for Department of Museums Malaysia;

Period to apply for income tax exemption for social enterprises extended to 2028;

Special tax cut of 10 per cent (up to RM10 million) for renovation and conversion of commercial buildings into residences


More pricey alcohol, smoking products

Increased excise duties from November 1, 2025 for smoking products, including 2 sen hike per cigarette stick;

Excise duties hike for alcohol from November 1, 2025: 10 per cent;


Other tax changes:

Tax exemption on vehicles in Langkawi, Labuan limited to max RM300,000 starting Jan 1, 2026


Other benefits

• RM20 million for continued rebates for energy efficient equipment purchases;
• Matching grant up to RM4,000 to encourage owners of old cars to buy new national cars;
• RM100 one-off Sara aid again next year in mid-February: For 22 million Malaysians aged 18 and above;
• RM1 billion next year for cost of living measures, including RM600 million for Payung Rahmah programmes nationwide;
• RM10 million incentives to organise concerts to attract foreign tourists.

EPFEPF withdrawal limit for Haj pilgrimage increased from RM3,000 to RM10,000;

To encourage EPF contribution for gig workers, e-hailing, p-hailing drivers: Matching incentive of RM600 per year or RM6,000 lifetime under i-Saraan Plus. i-Saraan with RM500 annual or RM5,000 lifetime incentive continued.

For EPF’s i-Suri scheme, age limit raised to age 60.
EPF contributors can use Akaun Sejahtera savings for medical and health insurance/ takaful.

SocsoUp to RM1,000 incentive for job-seekers or new graduates who have to move for their new jobs;

Maximum for each haemodialysis treatment increased to RM170.

Education and higher education

• RM120 million allocation per year for free PTPTN education for 5,800 public university students from poor families;
• PTPTN loan repayment exemption for all first class degree holders from public universities from low and middle-income families, with 6,000 to benefit with RM90 million allocation annually.
• If PTPTN borrowers can afford to pay and work abroad but deliberately do not repay, government to impose overseas travel ban.
• Bahasa Melayu still prioritised in all schools, but mastery of English to also be prioritised from primary school levels, in line with current demands.
• International schools have to teach BM to Malaysian students.

Major transportation projects coming soon

ETS rail link’s final phase to Johor Bahru Sentral, expected completion: End of 2025

LRT3 rail link expected operation: End of 2025

ECRL phase one for Kota Bahru-Gombak, expected completion: End of 2026


Major law reforms coming soon:

Government looking at reforms on criminal laws, law on coroners

Consumer Protection Act to be amended to include Lemon Law

New anti-bullying law

New cyber crime law to tackle scams and other cyber threats