Tariff Risk Alert: BNM flags US tariff headwinds as downside risk to 2025 growth. Malaysia GDP maintained at 4.4–4.9% (Q1 2025). Budget 2026 total expenditure: RM419.2 billion — largest in history.
—
GDP GROWTH 4.4–4.9% ▲ Q1 2025
INFLATION 1.8% ▲ Jun 2025
UNEMPLOYMENT 3.3% ▼ May 2025
OPR 3.00% HOLD
BUDGET 2026 RM419.2B ▲ 4.2%
DEFICIT -3.8% GDP ▼ Improving
REVENUE RM340.5B ▲ 6.1%
GDP GROWTH 4.4–4.9% ▲ Q1 2025
INFLATION 1.8% ▲ Jun 2025
UNEMPLOYMENT 3.3% ▼ May 2025
OPR 3.00% HOLD
BUDGET 2026 RM419.2B ▲ 4.2%
DEFICIT -3.8% GDP ▼ Improving
REVENUE RM340.5B ▲ 6.1%
Total Expenditure
RM419.2B
▲ +4.2% YoY
📑 MOF Budget 2026
GDP Growth (Forecast)
4.4–4.9%
◆ On Track
🏦 BNM Q1 2025
Inflation Rate
1.8%
▲ Stable
📊 Trading Economics Jun 2025
Fiscal Deficit
-3.8% GDP
▲ Narrowing
📑 MOF Fiscal Policy 2025
Budget 2026 — Where It Goes
RM419.2B
TOTAL
2026
2026
Emoluments109.4B26.1%
Development81.0B19.3%
Debt Service58.3B13.9%
Subsidies49.0B11.7%
Retirement42.3B10.1%
Supplies & Services40.3B9.6%
Others38.4B9.2%
Ministry Allocations — Top 14 (RM Billion)
Economic Indicators
BNM & Ministry of Finance Sources
GDP Growth Rate
4.4–4.9%
Target: 5.0%
Q1 2025
Growth underpinned by resilient domestic demand and strong services sector. BNM flags external headwinds from US tariff policy as key downside risk.
Inflation (CPI)
1.8%
BNM Target: 2–3%
Jun 2025
CPI remains well within BNM's comfort range. Targeted fuel subsidy rationalisation continues, with potential upward pressure in H2 2025.
Unemployment Rate
3.3%
Pre-COVID avg: 3.3%
May–Jun 2025
Labour market fully recovered to pre-pandemic levels. Budget 2026 allocates significant funds to skills development and job creation programmes.
Fiscal Position
| Total Revenue 2026 | RM340.5B |
| Total Expenditure 2026 | RM419.2B |
| Fiscal Deficit | -RM78.7B |
| Deficit/GDP | -3.8% |
| OPR (Current) | 3.00% |
Expenditure vs Revenue — Trend
Revenue 2024
RM321.0B
Revenue 2026
RM340.5B
Expenditure 2024
RM402.6B
Expenditure 2026
RM419.2B
Personal Tax Relief 2026
YA 2026 — All figures in RM
🧑 Individual Reliefs
Personal
Individual Self
RM9,000
Education
Education (Self)
RM7,000
Disability
Disabled Individual
RM7,000
Travel
Local Travel
RM1,000
Attraction tickets, cultural, artistic & performance events
Housing
Interest on Housing Loan (First-time)
RM7,000 / RM5,000
RM7,000: House <RM500k | RM5,000: House RM500k–RM750k
💊 Lifestyle & Health
Medical
Critical Illness Medical Expenses
RM10,000
Incl. RM1k check-ups, RM6k children learning disabilities
Lifestyle
Lifestyle
RM2,500
Books, e-devices, internet, self-improvement
Sports
Sports Equipment
RM1,000
Equipment, facility rental, gym, competition fees
Disability
Basic Disability Equipment
RM6,000
Self/spouse/children/parents
Green/Tech
EV Charging / Food Waste Disposer / CCTV
RM2,500
👨👩👧 Parents & Spouse
Spouse
Unemployed Spouse / Alimony
RM4,000
Disability
Disabled Spouse
RM6,000
Parents
Parents' Medical Expenses
RM8,000
👶 Child
Child
Unmarried Child
RM2K/8K
Below 18: RM2k | 18+ student: RM8k
Disability
Disabled Child
RM8,000
Childcare
Childcare / Preschool
RM3,000
Children below 12
Breastfeed
Breastfeeding Equipment
RM1,000
Children <2y, once/2 years
Savings
SSPN Scheme
RM8,000
🛡️ Insurance & Contributions
Insurance
Life Insurance / EPF
RM3,000
Insurance
Insurance for Education / Medical
RM4,000
Contribution
SOCSO & EIS
RM350
EPF
EPF Contributions
RM4,000
Retirement
PRS (Private Retirement Scheme)
RM3,000
🧮 Personal Income Tax Estimator — YA 2026
Gross Income
—
Individual Relief
− RM9,000
EPF Relief (max RM4,000)
—
Life Insurance Relief (max RM3,000)
—
Lifestyle Relief
—
Medical Relief
—
Total Reliefs
—
Chargeable Income
—
Estimated Tax Payable
—
Effective Tax Rate
—
Corporate & Business
Budget 2026 — Corporate Tax, Incentives & Policies
Corp Tax Rate (Standard)
24%
◆ Unchanged
Corp Tax (SME first RM150k)
15%
▲ Reduced from 17%
Withholding Tax (Non-Res)
15%
◆ Standard Rate
RPGT (Foreign Individuals)
30%
◆ All Years
🏆 Key Business Incentives — Budget 2026
AI & Technology Investment Incentive
Pioneer status with 0% tax (5+5 yrs) or ITA 100% for AI, semiconductor, advanced manufacturing investments >RM300M.
Green Investment Tax Allowance (GITA)
100% ITA on qualifying green capital expenditure. Expanded to include EV infrastructure, solar, energy efficiency systems.
Automation Capital Allowance
Accelerated capital allowance (ACA) in 1 year for automation equipment in manufacturing & services sectors.
Human Capital Development Deduction
Double deduction for HRDF-registered training, reskilling and upskilling expenses for employees (extended to 2028).
SME Go Digital Incentive
SMEs digitising operations get 50% matching grant up to RM500K under MDEC's Go Digital programme for YA 2026.
Industrial Zone Expansion — NIMP
National Industrial Masterplan incentives: Pioneer Status 10yr + 5yr extension for high-value manufacturing relocating to Malaysia.
📊 Corporate Tax Rate Table
| Category | Rate |
|---|---|
| Standard Corporate Tax | 24% |
| SME First RM150,000 | 15% |
| SME Above RM150,000 | 24% |
| Withholding Tax (Non-Resident) | 15% |
| Capital Gains Tax (unlisted shares) | 10% |
| SST (Service Tax) | 8% |
| Digital Services Tax (Foreign DSPs) | 8% |
⚠️ Key Compliance Deadlines
e-Invoice Phase 3 — All Businesses
All remaining businesses (turnover <RM100M) must implement MyInvois e-invoicing by Jul 2025
Deadline: 01 Jul 2025
Transfer Pricing Documentation
Updated TP guidelines effective 2024 — contemporaneous docs required for related-party transactions
YA 2024 onwards
Global Minimum Tax (GloBE/Pillar 2)
15% global minimum tax for MNEs with >EUR750M revenue. Malaysia implementing via QDMTT.
Effective: YA 2025
HRDF SBL-Khas Training Claim
Submit training claims within 6 months of programme completion. 2026 levy rate unchanged at 1%.
Ongoing — HRDF Portal
Monitor & Alerts
Budget & Economic Intelligence Tracking
🔔 Live Alert Feed
MONITORING
US Tariff Risk — BNM Warning
Bank Negara Malaysia flags US reciprocal tariffs as material downside risk to Malaysia's export-dependent economy. Key sectors: E&E, palm oil, rubber.
Aug 15, 2025 — Reuters / BNM
Budget 2026 Tabled — RM419.2B
PM Anwar Ibrahim tables Malaysia's largest-ever budget. Focus on economic restructuring, social protection, and digital economy.
Oct 18, 2025 — MOF Official
OPR Maintained at 3.00%
BNM Monetary Policy Committee holds OPR unchanged. Accommodative stance maintained amid balanced growth-inflation outlook.
Jul 2025 — BNM MPC
Inflation Stable at 1.8%
CPI June 2025 at 1.8% YoY — well within BNM comfort band. Subsidies rationalisation impact being absorbed gradually.
Jun 2025 — DOSM / Trading Economics
e-Invoice Mandatory — Phase 3
All businesses regardless of turnover must implement LHDN MyInvois e-invoicing. Non-compliance risk: penalty up to RM20,000.
Jul 1, 2025 — LHDN
Global Minimum Tax Live in Malaysia
Pillar 2 QDMTT effective YA 2025. MNEs with consolidated revenue >EUR750M subject to 15% minimum effective tax rate.
Jan 1, 2025 — MOF / IRBM
⚙️ Alert Preferences
Budget Policy Changes
MOF announcements & circulars
BNM Monetary Policy
OPR decisions & quarterly bulletins
LHDN Tax Compliance
Deadlines, e-Invoice, penalties
Inflation & CPI Data
Monthly DOSM releases
Subsidy & Welfare Changes
B40/M40 assistance programmes
GLC & BUMN Developments
Khazanah, PNB, LTAT investments
📡 Data Sources
Bank Negara Malaysia — Quarterly Bulletin Q1 2025
🟢 Live
Trading Economics — Malaysia CPI & Unemployment
🟢 Live
MOF — Budget 2026 Official Portal
🟢 Live
MOF — Pre-Budget 2026 Statement (PDF)
📄 Static
MOF — Fiscal Policy Committee Statement 2025
🟢 Live
Reuters — Malaysia Growth & Tariff Risk (Aug 2025)
📰 News