Malaysia's Bold Fiscal Reforms: A New Era of Economic Strategy

Malaysia plans to revamp subsidies and introduce new taxes in 2025 to address its fiscal deficit, with Prime Minister Anwar Ibrahim at the helm. The reforms aim to generate significant savings, target subsidies more effectively, and expand tax revenues while fostering sustainable economic growth.

Malaysia is set to redefine its fiscal policies next year, with Prime Minister Anwar Ibrahim announcing comprehensive reforms aimed at reducing the country's deficit. These measures will include the introduction of new taxes and a restructure of gasoline and education subsidies.

The nation's current subsidies cost an annual 80 billion ringgit, but are deemed unsustainable due to high debts and low tax revenues. The reforms, targeting a fiscal deficit reduction to 3.8% of GDP, will save billions while focusing support on those in need.

Despite potential backlash from working-class citizens, the reforms coincide with an anticipated economic growth of 4.5% to 5.5% in 2025. The government also plans to raise the minimum wage and expand sales and service taxes to boost revenues.

(With inputs from agencies.)