Budget 2026: Expanded Childcare Tax Relief To Boost Women’s Workforce Participation

KUALA LUMPUR, Oct 10 (Bernama) -- The government’s proposal under Budget 2026 to expand individual income tax relief for childcare and preschool expenses is expected to ease the cost-of-living burden for low- and middle-income families while encouraging more women to join the workforce.

Associate Professor Dr Amini Amir Abdullah of the Department of Nationhood and Civilisation Studies, Faculty of Human Ecology, Universiti Putra Malaysia (UPM), said the expanded tax relief will directly benefit working parents, particularly women in the formal sector.

He said the Department of Statistics Malaysia data showed female labour participation in 2024 was only about 56 per cent, compared to over 80 per cent for men, with childcare responsibilities being a key barrier.

“This policy recognises the reality that many parents still need after-school care their children. It strengthens the family support ecosystem and promotes a healthier work-life balance.

“It could also drive demand for registered childcare centres, enabling better regulation of quality and safety standards,” he told Bernama.

Amini Amir added that the initiative will encourage the formalisation of unregistered childcare providers, improve safety and welfare standards, as well as create new jobs in the early childhood care sector.

He described the expanded relief as ‘a progressive step’ to support family wellbeing, empower women and enhance Malaysia’s early childhood education ecosystem. However, he said that effective implementation must balance fiscal efficiency, social justice and gender equality.

Under Budget 2026, Prime Minister Datuk Seri Anwar Ibrahim announced that the RM3,000 tax relief for childcare and preschool expenses for children aged up to six will be extended to registered day care or transit centres for children aged up to 12, effective from the year of assessment 2026.

The Prime Minister also announced legal aid for 5,000 underprivileged single mothers to assist with divorce, alimony and child custody cases.

Welcoming the move, Women and Single Mothers Welfare Association (WITUS) president Shiela Tukimin said it was a major relief for women who cannot afford legal representation.

“With this assistance, single mothers can defend their rights in court without being burdened by high costs. It is not just legal aid, but social justice that upholds women’s dignity,” she said.

-- BERNAMA