Malaysia PM Anwar tables record RM393.8 billion Budget, rolls out several tax hikes and reforms

Against the backdrop of a lacklustre global economic recovery, analysts have predicted that the budget for the coming year will include “feel-good measures”, according to the New Straits Times.

Economists were also expecting Mr Anwar to announce steps to implement the capital gains and luxury taxes first proposed in the previous budget in order to broaden the revenue base, with some predicting an introduction of the Goods & Services Tax (GST) from late 2024 or early 2025, Reuters reported.

Mr Anwar was also expected to announce details on subsidy rationalisation to better help those in the lower-income group.

He had earlier told CNA in an interview that the current subsidy programme that ran up to US$17 billion last year is plagued by leakage and wastage and is not sustainable.

Malaysia, with a debt of RM1.399 trillion at the end of 2022, saw its economic growth in the second quarter hit the lowest in nearly two years.

The World Bank also recently revised Malaysia’s economic growth from 4.3 per cent to 3.9 per cent, sparking worries among economists that this will bode poorly for the local economy, according to local media.

In a bid to strengthen Malaysia’s economy, Mr Anwar has introduced economic plans like the Madani Economy Framework – which involves the comprehensive restructuring of the Malaysian economy – and the New Industrial Master Plan (NIMP) which seeks to increase the manufacturing sector’s value.