PETALING JAYA, October 18 – The Malaysian government has announced a record RM421 billion allocation for the 2025 federal budget, marking a significant RM27.2 billion increase from 2024’s RM393.8 billion budget. This is the first time the budget has surpassed RM400 billion, with RM335 billion (79.6%) set aside for operational expenditure and RM86 billion for development projects.
Among the notable highlights is a new 2% tax on dividend income exceeding RM100,000 earned by individual shareholders, starting from the 2025 assessment year. Additionally, the expanded Sales and Services Tax (SST) will be fully implemented on May 1, 2025. Service tax will be broadened to include more commercial services, such as fee-based financial services, while basic food items will be exempt from sales tax.
However, premium imported goods like salmon and avocado will continue to be taxed, reflecting the government’s efforts to support local industries while ensuring revenue from high-end imports. These measures are part of a broader strategy to strengthen the nation’s fiscal position and drive economic growth.
