PwC Malaysia has welcomed the Government’s Budget 2026, which focuses on consolidating existing tax measures and enhancing enforcement. Steve Chia, Tax Leader at PwC Malaysia, praised the Government’s decision to pause expansionary tax measures, opting instead for a more strategic approach to tax governance and social outcomes.
Budget 2026 aims to save RM15.5 billion annually through subsidy rationalisation, including for RON95 fuel, allowing these funds to be redirected to targeted groups. Personal tax reliefs have been expanded to include life insurance for children and vaccination relief for all approved vaccines. Additionally, childcare fee relief now covers registered centres for children up to 12 years old.
The budget underscores the Government’s commitment to tax enforcement, building on previous initiatives like the Tax Identification Number and e-Invoicing. Chia noted that whilst the budget sets a clear tone for strengthening tax governance, the success of these reforms will depend on their implementation.
In a bid to boost high-growth sectors, the Outcome-Based Incentive Framework will be fully implemented for manufacturing and services in 2026. This aligns tax incentives with national priorities such as semiconductors and AI. Enhanced venture capital incentives aim to support start-ups in strategic areas like energy transition.
Property measures include extending stamp duty exemptions for first-time homebuyers and increasing rates for non-citizens to kerb speculation. A special tax deduction for converting commercial properties to residential use is also proposed.
Sustainability efforts are highlighted with the introduction of a carbon tax and expanded tax relief for sustainable consumption. These measures are expected to drive investment in low-emission technologies and promote greener behaviours among Malaysians.
