KUALA LUMPUR,The government is likely to introduce new tax measures in Budget 2026 as part of efforts to strengthen fiscal sustainability and reduce reliance on petroleum-related income, according to economists and tax experts.
With the national budget deficit still hovering above 4% of GDP and subsidy rationalisation ongoing, analysts believe Putrajaya will look at broadening the tax base, possibly through the reintroduction of the Goods and Services Tax (GST) or a new form of consumption tax.
“Malaysia needs a more sustainable revenue stream. Budget 2026 could be the right time to roll out a consumption-based tax system, but it must be designed carefully to avoid burdening lower-income households,” said an economist quoted by The Edge.
Other potential measures under consideration include:
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Capital gains tax expansion — extending the recently introduced capital gains tax on unlisted shares to cover more asset classes.
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High-income tax adjustments — revising top marginal income tax rates for higher earners.
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Luxury tax implementation — targeting high-value goods and services.
Finance Minister II Datuk Seri Amir Hamzah Azizan has not confirmed if GST will return but stressed that “the government is studying all options to ensure long-term fiscal resilience.”
Budget 2026, expected to be tabled in Parliament this October, will mark the second budget under Prime Minister Datuk Seri Anwar Ibrahim’s administration and is seen as a test of balancing economic growth with fiscal reforms.
Market watchers said investors will be monitoring closely whether the government pursues new tax initiatives or opts for a gradual approach ahead of a possible general election.
