Treasury Secretary-General Tan Sri Johan Mahmood Merican says the delayed RM2,000 minimum wage implementation allows MSMEs time to adapt their business operations.
PUTRAJAYA: The RM2,000 minimum wage exemption for micro, small and medium enterprises (MSMEs) with annual sales revenue below RM50 million, effective June 2027, aims to give these businesses room to adjust their respective operating models.
Treasury Secretary-General (KSP) Tan Sri Johan Mahmood Merican said the measure takes into account employers’ capacity, particularly that of small businesses facing operating cost pressures and global economic uncertainties.
“Under Budget 2027, the minimum wage will be increased from RM1,700 to RM2,000 a month, starting from June 2027.
“The government will also introduce a worker income framework that sets a starting minimum salary of RM2,500 for semi-skilled jobs and graduates, as part of an effort to improve the wage structure according to skill levels,” he said at a briefing on Budget 2027-related issues organised by the Information Department Malaysia yesterday.
During the 90-minute online programme, Johan said wage increases must also be supported by productivity growth to ensure businesses can continue operating to provide job opportunities.
Meanwhile, financing facilities and guarantees for MSMEs and mid-sized companies will be increased to RM57 billion in 2027 versus RM50 billion this year.
This facility is to help businesses manage cash flow, expand operational capacity, and invest in equipment and technology.
“The government has also proposed to reduce income tax rates for eligible MSMEs from the 2027 assessment year, from 15 per cent to 14 per cent on the first RM150,000 of chargeable income, and from 17 per cent to 16 per cent on the portion between RM150,001 and RM600,000,” he said.
The measure is estimated to benefit about 300,000 MSMEs, with an annual tax savings of up to RM6,000.
Additionally, an extra RM5 billion in financing through Bank Negara Malaysia will be made available to assist affected businesses, including those impacted by supply chain disruptions and cost pressures arising from the West Asia conflict.
Johan said efforts to raise workers’ incomes must go hand in hand with measures to strengthen businesses, as companies’ continued viability also determines employers’ ability to offer better wages.
“The government hopes this approach will help workers enjoy higher incomes without overlooking the need for MSMEs to improve productivity and competitiveness,” he said.
On Friday (Oct 9), Prime Minister Datuk Seri Anwar Ibrahim, who is also the Finance Minister, tabled Budget 2027 with a government allocation of RM459.8 billion. This is supplemented by RM25 billion in investments from government-linked investment companies (GLICs), RM11 billion in public-private investments, and RM14.2 billion in investments by federal statutory bodies and Minister of Finance Incorporated (MOF Inc) companies.
This brings the total under Budget 2027, which continues an expansionary fiscal policy, to RM510 billion.
The fifth MADANI Budget aims to translate resilient economic growth into tangible benefits for the people through better wages, more efficient targeted assistance, stronger fiscal discipline, and aggressive efforts to move towards higher-value industries.