KUALA LUMPUR (Sept 27): After a slew of tax measures — including the expanded sales and service tax (SST), continued roll-out of e-invoicing, a global minimum tax and dividend tax — tax experts see some respite in the upcoming Budget 2026 to be tabled in Parliament on Oct 10. 

Penalty waivers during the transition to new compliance regimes, coupled with a possible review of personal income tax rates for middle-income earners, could be among headline relief measures. 

After all, businesses and the rakyat are still digesting recent changes.

As emphasised by Farah Rosley, Malaysia tax managing partner at Ernst & Young Tax Consultants Sdn Bhd, what is needed is clarity and stability at a time when people are grappling with geopolitical developments, changes brought on by the US’ new tariff regime and global trade regulations.

Given the broadening of the tax base, what is on everyone’s mind is whether Putrajaya will manage to achieve its record-breaking RM340 billion target in revenue collection for 2025, up from RM325 billion in 2024.

In any case, Malaysia’s fiscal position has shown improvement. And with the next general election on the horizon, the Madani government does have something to show with the improvement in fiscal position. The government has also started to implement long-promised reforms, including diesel subsidy rationalisation, electricity tariff adjustments and, most recently, petrol subsidy rationalisation. Granted, the extent and impact of these reforms remain open to debate. 

According to the Ministry of Finance’s latest quarterly fiscal report, federal government revenue increased 6.1% in the first half of 2025 (1H2025) from the same period last year. At RM147.6 billion of total revenue, it made up 43.5% of the target set in Budget 2025. The overall increase in revenue was attributed to a 12.1% rise in tax revenue in 1H2025 to RM119.1 billion due to a higher corporate tax collection as well as more SST contributions.  

There should be more upside for tax revenue in 2H2025 with the expanded SST scope, which kicked in on July 1, 2025, leading some to believe that federal government tax revenue could top the budget estimate of RM259 billion for 2025.

The expectation is for fiscal consolidation to continue as revenue grows while expenditure remains modest. 

Read more on what economists and tax experts expect from Budget 2026 in Cover Story 1 in this week’s issue of The Edge Malaysia.  

Meanwhile, in Cover Story 2, read about IJM Corp Bhd (KL:IJM) shifting gears in the UK, where it is undertaking more developments, such as regenerating and repurposing heritage buildings into environmental, social and governance (ESG)-compliant modern structures.

IJM has been in the UK since 2012.

The reason for the shift is simple: the Malaysian construction giant is hungry for growth.

IJM will soon shift gears across the Causeway as well, its group managing director Datuk Lee Chun Fei tells The Edge in an interview at an upscale department store in London. “We need more markets for growth. Everyone knows the Malaysian [property] market has reached a certain saturation. The chase for property is unlike 10 years ago, when land [cost] escalation was not as high,” he says. “The only thing that’s pushing our [property] prices is cost. You know it’s not supply-demand that is causing prices to run up, but it’s all about the cost.”

Read the rest of the story in The Edge Malaysia this week.

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