Highlights From Budget 2025

Below are the highlights from Budget 2025 tabled by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim.

This is the third MADANI budget tabled by Anwar since becoming the 10th prime minister on 24th November, 2022.

• The third MADANI Budget 2025 resulted from the planners' persistent efforts after taking into account global challenges, uncertainty that are strengthening.

• The country's economy is projected to grow strongly between 4.5% and 5.5%, supported by MADANI Budget 2025

• Malaysia 2024 GDP is projected to be stronger between 4.8 and 5.3%, compared to between 4.0 and 5.0% previously.

• Fiscal deficit is forecast at 3.8% in 2025 compared with 4.3% estimated for this year.

• Revenue collection is projected higher to RM322 billion in 2024 instead of RM308 billion .

• New debt will continue to decline and is forecast to be RM80 billion in 2025 compared with RM85 billion in 2024.

• The Sales and Service Tax will be implemented in a more progressive way and will not burden the rakyat.

• Govt expects revenue collection will continue to rise in 2025 to RM340 billion.

• Sales tax will not be imposed on basic food items used by the people, only on non-essential goods such as imported premium goods.

• The scope of the Service Tax will be broadened to cover commercial services such as fee-based financial services.

• Govt to hold engagement sessions with stakeholders and related industries before finalising the broader scope and rate to be imposed.

• The progressive broadening of the SST scope will be implemented effective May 1, 2025.

• Govt to broaden the tax base progressively by introducing 2% tax on dividend income exceeding RM100,000 gained by individual shareholders from assessment year 2025.

• Consideration will be given to exempt dividend income from govt funds such as EPF, unit trusts under PNB as well as dividends from overseas.

• Govt will continue to bear subsidies totalling an estimated RM12 billion to assist 85 pct of the people.

• The govt plans to implement targeted subsidy for RON95 petrol in the middle of 2025.

• The govt announces RM421 billion Budget 2025 comprising operating expenditure of RM335 billion and development expenditure of RM86 billion, excluding RM2 billion contingency savings.

• 2025 public investment for development totals RM120 billion.

• Pan Borneo Highway project expected to be completed by November 2024 with Pan Borneo Sabah and Sarawak involving a combined expenditure of RM25.1 billion.

• Public-Private Partnership Masterplan's main focus is to boost private sector investment by RM78 billion, creating 900,000 job opportunities by 2030.

• Govt to table the Consumer Credit Bill at an upcoming meeting.

• The govt to set up Consumer Credit Oversight Board to regulate non-bank credit providers and credit services providers including Buy Now, Pay Later.

• Govt plans to implement a multi-tier levy mechanism early next year to reduce dependence on foreign labour.

• Revenue from the levy collection to be re-channeled to the industry players to drive their business processes towards automation and mechanisation.

• The govt allocates RM50 million for MSME digital matching grant, digital grants for hawkers under BSN for local entrepreneurs to maintain their competitiveness.

• Khazanah is providing RM1 billion to spearhead investments that support local semiconductor industry.

• The govt has approved Forest City as a duty-free island to support tourism activities and the local economy.

• Khazanah to launch a Mid-Tier Company Programme with RM1 bln fund to support local companies' capacity-building efforts.

• Logistics firms undertaking smart logistics complex activities will be given 60% investment tax allowance for 5 years.

• The Green Technology Financing Scheme will be continued with RM1 billion allocation until 2026.

• UEM Lestra, TNB to invest RM16 billion for transmission, distribution capability and decarbonisation for industrial areas.

• PERODUA plans to produce EVs priced below RM100,000 to cater to demand.

• The CKD Electric Motorcycle Use Promotion Scheme's RM2,400 rebate to be continued with a RM10 million allocation.

• Allocation for Felda, Felcra and Risda is increased to RM2.6 billion in Budget 2025 compared with RM2.4 billion previously.

• In total, RM40 billion has been allocated for business loan facilities and financing guarantees under govt agencies.

• Govt plans to raise windfall profit levy threshold value on palm oil prices in the peninsula to RM3,150 per tonne and for Sabah and Sarawak to RM3,650 per tonne.

• Govt has approved RM1.3 billion allocation to empower G1-G4 contractors, particularly bumiputera.

• RM65 million allocation provided to boost sustainable palm oil and safeguard the palm oil industry against misconceptions in Europe.

• Programme to encourage smallholders' latex production under Risda to be implemented via matching grants totalling RM60 million.

• Syarikat Jaminan Perniagaan Bhd prepared to provide guarantee coverage of up to 80% for halal SME financing with guarantee value totalling RM1 billion.

• Housing Credit Guarantee Scheme has approved RM12.8 billion in govt guarantees to 57,000 first-time home buyers.

• Govt calls for the target of 30% female representation on boards in all top 100 Bursa Malaysia-listed companies to be achieved by end-2027.

• Govt agrees to introduce a New Investment Incentive Framework that focuses on high-value activities as opposed to existing incentives that are based on certain products.

• New Investment Incentive Framework is expected to be implemented in the third quarter of 2025.

• KWAP through its Dana Perintis is ready with RM1 billion to support the activities of local start-up companies.

• KWAP through the RM6 billion Dana Pemacu will strengthen the local private market covering private equity, infrastructure and real estate.

• National Fund-of-Funds (NFOF) will be established under Khazanah operating next month with a RM1 billion fund.

• Khazanah Nasional readies RM1 billion lead investment to support the local semiconductor industry

• Towards the implementation of e-Invoicing on July 1, 2025, the government proposes that expenditure on the purchase of ICT equipment, computer software packages and consulting fees be given an accelerated capital allowance and claimed within two years.

• RM800 million in financing under MARA and PUNB is available for more bumiputera entrepreneurs including supporting local artisans.

• Halal Development Corporation (HDC) merges with Malaysia External Trade Development Corporation (MATRADE).

• Incentives amounting to RM100 million are provided to smallholders for the replanting of oil palm.