On 9 October 2026 the Prime Minister and Finance Minister tabled Budget 2027 ("Belanjawan MADANI Kelima"). For companies and professionals planning AI and technology upskilling, several measures matter: more HRD Corp training funding, a fund to help SMEs adopt AI, extended capital allowances for ICT, and tax relief that now covers AI subscriptions for individuals. This is our summary of the speech, with its paragraph numbers so you can check the source.
At a glance
| Measure | Who it helps | What the speech says |
|---|---|---|
| HRD Corp training fund | Employers, professionals | RM3 billion fund to offer 3 million skills-training places, including continuous professional development (¶155) |
| MDEC AI adoption fund | SMEs | RM30 million to help 4,000 SMEs adopt AI and automate operations; also trains and certifies 5,000 AI professionals (¶157) |
| Accelerated Capital Allowance | Companies | For local plant, machinery, and ICT equipment and software, extended to 31 Dec 2030 (¶128) |
| Small-asset allowance limit | Companies | Limit per asset raised to RM3,000; overall claim limit for non-SME companies raised to RM30,000 (¶128) |
| SME income tax cut | SMEs | Rate cut by one percentage point: 14% on the first RM150,000 and 16% on RM150,000–600,000 (¶127) |
| Bakat MADANI tax deduction | Companies running training programmes | Tax deduction for companies that run Bakat MADANI training, from 29 Jun 2026 to 31 Dec 2030 (¶154) |
| AI subscription tax relief | Individuals | Lifestyle relief extended to cover AI subscriptions; education and skills-fee relief widened (¶29–30) |
1. Funding for training
- HRD Corp: RM3 billion, 3 million training places. The speech says HRD Corp will offer 3 million skills-training places, including professional development for working professionals (¶155). Claims still follow HRD Corp's own rules. Agmo Academy is an HRD Corp registered training provider and our programs are HRD Corp claimable, subject to eligibility and HRD Corp approval; see our HRD Corp claim guide.
- TVET and skills financing. TVET funding across ministries totals RM8 billion, and the skills development fund PTPK will provide RM500 million to finance trainees at PTPK-registered public and private skills institutions (¶155).
- Bakat MADANI. To draw in more private companies, the speech announces a tax deduction for companies that run Bakat MADANI training programmes (29 June 2026 to 31 December 2030). The 2027 target is 30,000 new job opportunities (¶153–154).
- CIDB digital and robotics training. CIDB will train 10,000 young people in robotics and digital technology (¶155).
2. Support for AI adoption and AI skills
- RM30 million MDEC fund for SMEs. It is meant to help 4,000 SMEs apply AI and automate operations, and to train and certify 5,000 AI professionals (¶157).
- National AI skills target. AI Malaysia Berhad receives nearly RM15 million to strengthen a safe and ethical AI ecosystem, with a target of 200,000 AI-skilled workers (¶157).
- Free AI tools and courses for young people. 100,000 more free AI subscriptions, now extended to newer AI apps such as ChatGPT, and free digital courses through the Platform Rakyat Digital with Coursera: more than 16,000 courses and professional-certificate programmes (¶157).
- Research and infrastructure. RM6 billion across ministries for research, development and commercialisation, and a Sovereign AI Cloud in planning so that citizens' data stays under Malaysian control (¶157).
3. Tax measures that help companies invest in technology
- Accelerated Capital Allowance for local plant and machinery, and ICT equipment and software, is extended to 31 December 2030 (¶128). If your AI roll-out involves buying hardware or software, this affects your timing and cash flow.
- Small-asset allowance: the per-asset limit rises to RM3,000, and for companies other than SMEs the overall claim limit rises to RM30,000 (¶128).
- SME tax rates fall by one percentage point (14% up to RM150,000, 16% from RM150,000 to RM600,000), which the speech says adds up to RM6,000 of extra income for about 300,000 SMEs (¶127).
4. For individuals
The expanded individual tax relief now covers AI subscriptions under the lifestyle category, and the relief for education and skills fees is widened to all fields of study, plus children's tuition (¶29–30). The speech also raises the individual tax relief limit, unchanged since 2010, from RM9,000 to RM12,000. If you pay for AI tools or courses yourself, keep your receipts and check the final relief categories and caps with LHDN.
What we did not find in the speech
We did not find a new, separate corporate tax deduction aimed specifically at AI course fees. Training funding continues mainly through HRD Corp, plus the Bakat MADANI deduction above. If the Finance Bill or later guidelines add anything, we will update this page.
How to use this if you run a team or a company
- Check your HRD Corp levy position and plan your 2027 training calendar early, since funding is expected to be in demand.
- Pick specific AI skills for specific roles rather than a general course. See AI training programs and pricing and our guides for finance, HR and sales and marketing.
- If you are an SME, ask MDEC how to apply for the AI adoption support when details are released.
- If you plan to buy ICT equipment or software, ask your tax adviser how the extended capital allowance applies.
- Put governance in place first. See AI governance and the PDPA.
Want help planning? Message us on WhatsApp and we'll help you map training to your goals and your HRD Corp claim.