Budget 2025

Budget 2025 was tabled in Parliament on 18 October 2024 with the theme of “Revitalising the economy, generating change, prospering the Rakyat”.

Budget 2025
at a glance

On the back of positive economic sentiments, the government is well-positioned to pursue sustainable strategies to further fuel the economy

Real GDP growth in 20254.5% - 5.5%

Headline inflation in 20252.0% - 3.5%

Unemployment rate in 20253.1%

Fiscal position

-3.8%

Budget deficit, % of GDP in 2025

3.3%

Increase in overall expenditure for 2025

63.1%

Federal Government Debt, % of GDP (as of June 2024)

Rakyat

Workforce

Additional tax deductions of up to 50% for hiring women returning to the workforce, implementing flexible work arrangements and granting paid caregiver leave

Personal tax relief

Increase in personal tax relief for education and medical insurance from RM3,000 to RM4,000

Expansion of scope for medical expenses for self, spouse and child up to RM 10,000

Income tax exemption on child care allowance expanded to include elderly care

First-time homebuyer

Reinstate tax relief on housing loan interest payments

Digital

A New Investment Incentive Framework (NIIF)

Including a strategic investment fund worth RM1 bn to encourage high-value activities such as integrated circuit (IC) design services

Artificial Intelligence (AI)

Several measures to progress Malaysia’s AI aspirations including:

○ RM10 mn for the National Artificial Intelligence Office

○ Establishing the ASEAN AI Safety Network

○ RM50 mn to expand AI education to all research universities

Taxes

Sales and Service Tax
Expansion of Sales and Service Tax (SST) by 1 May 2025 to include B2B commercial service transactions and non-essential food items

Dividend Tax
2% tax on dividend income where annual dividends exceed RM100,000, with certain exceptions

Subsidy

RON95
Subsidy rationalisation will take place in mid-2025

Education and health

Subsidy rationalisation for higher education institutions and public hospitals

Sustainability

National Energy Transition Roadmap
RM300 mn in additional funds allocated to NETR initiatives from RM100 mn

Carbon Tax
to be introduced on iron and steel, and energy industries by 2026 with revenue to fund green research and technology programmes

Climate adaptation
At least RM3.85 bn allocated for flood mitigation and disaster preparedness projects

Wages

Minimum wage
Monthly minimum wage raised to RM1,700 from RM1,500 beginning 1 Feb 2025

Progressive Wage Policy
The Progressive Wage Policy will be fully implemented next year, with a budget of RM200 mn benefitting 50,000 workers

Investment and trade

The Budget recognises the importance of remaining competitive, investing in entrepreneurship as well as sustainable development

Public-private partnerships

To increase private investment by RM78 bn through Pelan Induk Kerjasama Awam-Swasta (PIKAS) and generate 900,000 job opportunities by 2030

Direct domestic investments

Through the GEAR-uP initiative, GLICs will increase direct domestic investments totalling RM120 bn over a period of 5 years, with RM25 bn to be invested next year

Power sector

UEM Lestra and Tenaga Nasional Bhd (TNB) to invest RM16 bn to upgrade the grid and decarbonise industrial areas

Download (PDF)

PwC Centre Stage: Budget 2025 Overview

Our views in the media

Pre-Budget
Post-Budget

Pre-Budget

Post-Budget

Budget 2025 blogs

Stay ahead of the curve with our analysis and insights on Budget 2025

Tiny Mic, big takes

Our people share their hopes and expectations for Budget 2025

Budget 2025 Seminar

Tuesday, 5 November 2025 | 8:00am - 5:00pm

More Budget 2025 Tax Insights

Navigate Budget 2025 with the key tax proposals and the quick reference guide on Malaysian tax information

TaXavvy

Malaysian Tax Booklet

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Contact us

Steve Chia

Tax Leader, PwC Malaysia

Tel: +60 (3) 2173 1572

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