BUDGET 2027 | Companies other than micro, small, and medium enterprises (MSMEs) will be able to claim tax deductions on salary expenses only if wages are paid through bank accounts or other approved channels, Prime Minister Anwar Ibrahim announced today.

Tabling Budget 2027 in the Dewan Rakyat, Anwar said the measure was intended to make it harder for employers to hire migrant workers without permits.

“On the issue of wages, to close the space for employers to hire migrant workers without permits, companies other than MSMEs can only claim tax deductions on salary expenses if these are paid through bank accounts, in line with the permitted channels,” he said.

The measure adds a tax consequence to existing labour rules on wage payments and creates a traceable payroll record for larger companies.