KUALA LUMPUR: Malaysia's 2025 Budget, the largest in the nation's history at RM421 billion, is set to rejuvenate the economy and drive transformative change, according to Malaysian Institute of Economic Research (MIER) executive director Dr. Anthony Dass.
The budget allocates RM335 billion for operating expenses and RM86 billion for development initiatives and is expected to enhance the well-being of the people under the MADANI economic framework.
Dass highlighted the government's goal of raising RM322 billion in revenue through measures such as increased sales and service tax (SST), a progressive luxury tax, a global minimum tax for large corporations, a carbon tax, and improved tax compliance.
He commended the government's support for the B40 and M40 groups, emphasising initiatives like housing, subsidies, and financial aid to ease living costs while ensuring access to education and healthcare.
However, Dass advised caution with the rationalisation of subsidies, particularly fuel subsidies, as reductions may increase living costs for lower-income groups.
Small and medium-sized enterprises (SMEs) will benefit from tax incentives for automation and digitalisation, along with loan facilities and funding schemes.
RM20 billion has been earmarked to support SME growth in the green economy and technology sectors.
Dass also mentioned that the planned increase in the minimum wage from RM1,500 to RM1,700 aims to improve living standards for low-income workers, though its success will depend on business reactions and supportive government policies.
The government's focus on attracting foreign direct investment (FDI) in sectors such as technology, renewable energy, and semiconductors, with a focus on sustainability, is intended to enhance Malaysia's appeal as a top FDI destination.
Additionally, the government's target of reducing the fiscal deficit to 3.8 per cent by 2025, down from 4.3 per cent in 2024, reflects a commitment to fiscal prudence and sustainability.
Dass noted that these efforts, alongside job creation and the promotion of economic growth through green technology and sustainable projects, signal a stable and optimistic outlook for Malaysia's economy.