Budget 2026: Key Highlights for Everyday Malaysians & SMEs

Malaysia’s Budget 2026 focuses on easing living costs, enhancing income support, and strengthening small-business resilience. From new tax reliefs to business grants and cost-of-living assistance, here are the key highlights that affect individuals, families, and SMEs.

Cost of Living & Financial Aid

• Cash Assistance for Malaysians:
  A one-time Sumbangan Asas Rahmah (SARA) payment of RM100 will be given to 22 million Malaysians aged 18 and above in February 2026.
  
  
• Ongoing Monthly Support:
  • Nearly 9 million Sumbangan Tunai Rahmah (STR) recipients will continue to receive SARA aid of up to RM100 monthly (RM1,200 annually).
  • Meanwhile, 1 million e-Kasih households will get up to RM200 monthly (RM2,400 yearly).
    
    
• Household & Individual Benefits:
  Single individuals receive RM600, while lower-income families can receive up to RM4,600 annually through combined STR and SARA aid.

• Additional Measures:
• Contract retirees under the Department of Community Development (KEMAS) to receive a monthly allowance increase from RM300 to RM500.
• Vehicle scrappage incentive: Malaysians replacing cars over 20 years old with a new national car will get a matching grant of up to RM4,000.
• Paddy farmers and agropreneurs: RM2.62 billion allocated for farming subsidies and mechanisation support, with RM1.1 billion in financing to help agricultural entrepreneurs modernise operations.

Tax Reliefs & Personal Finance Benefits

• Expanded Tax Reliefs for Families:
• Relief for childcare fees raised to cover registered day-care or transit centres for children up to age 12 (previously capped at 6 years old).
• Relief for disabled children’s medical care increased from RM6,000 to RM10,000.
• Life insurance/takaful relief (RM3,000) now extended to cover children’s policies.
• Vaccination relief expanded to include all vaccines registered by the Ministry of Health.
  
  
• Home Ownership Support:
• Full stamp duty exemption for first-home purchases up to RM500,000 extended until 31 December 2027.
  
  
• Lifestyle & Sustainability Reliefs:
• RM2,500 relief for EV charging facilities, composting machines, food waste grinders, and household CCTV — claimable once between 2026–2027.
• RM1,000 special relief for entrance fees to local tourist attractions and cultural programmes, encouraging domestic tourism.

Support for SMEs and Entrepreneurs

• Bigger Financing Access:
• Government loan facilities and guarantees for entrepreneurs increased to RM50 billion (from RM40 billion).
• RM2.5 billion in microfinancing through BSN and Tekun Nasional.
• Syarikat Jaminan Pembiayaan Perniagaan (SJPP) to guarantee up to 70% of financing for export-oriented mid-tier companies, with total guarantees raised to RM5 billion.
• Halal business loans guarantee allocation doubled to RM2 billion.
  
  
• Tax Incentives for Growth:
• 100% income tax exemption for new companies involved in food production (10 years), and 5-year exemption for existing companies expanding projects.
• 50% additional tax deduction for AI and cybersecurity training for SMEs.
• Tax deductions for companies and individuals contributing to government community programmes.
  
  
• SME Export and Innovation Support:
• RM60 million via the MATRADE Market Development Grant to help SMEs export to new regions including Africa, Latin America, and Central Asia.
• RM500 million in EXIM Bank soft loans for companies affected by global trade tensions.
• RM10 million National Spin-Off Fund for commercialisation of public university R&D.
  
  
• Simplified Regulations:
• From 2026, stamp duty exemption on employment contracts will apply to salary thresholds up to RM3,000 per month (previously RM300), reducing cost of doing business.

Gig Workers, Employees & Human Capital Development

• Gig Economy Support:
• i-Saraan Plus offers gig workers matching EPF contributions up to RM600 per year or RM6,000 lifetime.
• Self-Employed Social Security Scheme contributions subsidised by 70% (year one) and 50% (year two) for gig workers in non-mandated sectors.
  
  
• EPF Withdrawals:
• Hajj withdrawal limit increased from RM3,000 to RM10,000.
  
  
• Youth Entrepreneurship & Training:
• RM150 million BSN financing for entrepreneurs aged 30 and below.
• RM12 million via SME Corp’s Tunas Usahawan Belia Bumiputera programme for training and business support.
• B2 motorcycle licence fees covered for low-income youths joining delivery services.

Healthcare, Education & Social Protection

• MySalam Scheme Extended:
  Continued protection in 2026 for low-income households covering hospitalisation and critical illnesses.
  
  
• Education Support:
• RM120 million yearly allocated for PTPTN free education scheme, helping 5,800 students from poor families.
• First-class graduates from low- and middle-income families will be exempted from PTPTN repayment (benefiting ~6,000 borrowers).
  
  
• Healthcare Access:
• Private hospitals allowed to set up tax-exempt Hospital Welfare Funds to assist underprivileged patients; donors qualify for tax deductions.
• General practitioners’ consultation fees revised from RM10–RM35 to RM10–RM80.

Consumer Protection & Digitalisation

• Enhanced Consumer Rights:
• Consumer Protection Act to be amended to include Lemon Law elements, ensuring better safeguards for faulty product buyers.
  
  
• Digital Identity Expansion:
• MyDigital ID to expand across financial, telecommunications, e-commerce, and healthcare sectors, enhancing online security and service efficiency.

Looking for banking solutions to support your financial goals in tandem with Malaysia’s Budget 2026? Apply online now or try on the MAE app for size to manage all your banking and lifestyle needs in one place.