PETALING JAYA: Malaysians will enjoy a special income tax relief of up to RM1,000 for domestic travel expenses in 2026, while tourism operators and taxi drivers will also benefit from a raft of incentives under Budget 2026.
Prime Minister Datuk Seri Anwar Ibrahim, in tabling the budget in Parliament today, said the measures were part of a wider push to boost tourism ahead of Visit Malaysia Year (VMY) 2026, with Malaysia targeting 47 million visitors and RM329 billion in tourism receipts.
“We want to encourage more Malaysians to travel locally while strengthening the competitiveness of our tourism industry.
“This will ensure the economic spillovers are felt by small traders, entrepreneurs, craft producers and the rakyat as a whole,” he said.
Tourism operators refurbishing or upgrading premises will be entitled to tax deductions of up to RM500,000 on eligible expenses.
Operators will also receive a 100% income tax exemption on increased revenue from inbound tour packages, while organisers of international conferences, exhibitions and incentive events will enjoy the same full exemption.
Companies hosting international arts, cultural, tourism, sports and recreational events involving foreign participants will be given a 50% exemption on statutory income.
To support the sector, the government is allocating more than RM700 million, including RM500 million for the Visit Malaysia 2026 campaign, RM60 million for promotional activities, RM50 million to aid craft and heritage players, and another RM50 million in matching grants to attract international flights.
A further RM25 million will be used to upgrade UNESCO sites such as Gunung Mulu National Park, Lenggong Valley and FRIM Forest Park, while RM20 million has been set aside to expand health tourism.
Langkawi will also remain a key focus, with new geopark attractions including Kilim Geoforest Park, the Gua Selat Panchor trail and a hiking geotrail under the Langkawi UNESCO Global Geopark.
Anwar said the government would continue to support taxi drivers through full excise and sales tax exemptions for the purchase of new Proton and Perodua cars by taxi and private hire operators.
In addition, HRD Corp will allocate RM10 million to cover training courses and allowances for licensed taxi drivers.
