KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim has galvanised RM470 billion resources in Budget 2026, prioritising economic resilience and expanded support for small businesses to future-proof the economy amid persistent global uncertainties and regional headwinds and also goes hard on enforcement to prevent economic leakages.
Budget 2026, themed the Fourth MADANI Budget: People’s Budget, will pool and optimise national resources including GLIC (government-linked investment companies) funds, federal statutory bodies and MKD (Minister of Finance Inc) companies through public expenditure totalling RM470 billion compared to RM452 billion last year.
He said the figure includes RM338.2 billion federal operating expenditure (OE), RM81 billion federal development expenditure (DE), RM30 billion GLIC investment, RM10 billion public-private investment, and RM10.8 billion investment by federal statutory bodies and MKD companies.
“Raising the theme of the Fourth MADANI Budget: The People’s Budget — after daring to carry out reforms, now is the time to return the revenue to the people,“ Anwar, who is also the Finance Minister, said in Parliament today.
Budget 2026 is the fourth MADANI Budget and the first under the 13th Malaysia Plan (2026-2030).
The Prime Minister said that in an effort to raise the economic ceiling and the people’s living standards, the government must increase fiscal efficiency, close loopholes and strengthen national institutions.
He said the Gross Domestic Product (GDP) in the first half of 2025 recorded encouraging growth at 4.4%.
Despite pressure from the US tariff war, he said the revised GDP forecast for 2025 of between 4.0 and 4.8% proved that the country’s economy remained resilient.
For 2026, Anwar said the Malaysian economy was projected to grow between 4.0 and 4.5% due to global economic uncertainty and ongoing geopolitical and geoeconomic disputes.
“Next year, the federal government’s revenue collection is estimated to increase to RM343.1 billion from the RM334.1 billion projected this year,“ he said.
He explained that normally taxes would be imposed when additional spending was needed for infrastructure and assistance to the people, but the government chose to improve governance, including targeting subsidies without increasing the burden on the people.
The Prime Minister said that in the face of increasingly fierce global competition, the government is prioritising high-growth strategic investments such as semiconductors, energy transition and digital.
Therefore, the government will facilitate the affairs of investors by introducing the ASEAN Business Entity (ABE) status coordinated by the Securities Commission Malaysia (SC), the Single Family Office Incentive Scheme gazetted for the Forest City Special Financial Zone, the Investor Pass led by MIDA providing Multiple Entry Visa facilities of up to 12 months to foreign investors, and the Residence Pass–Talent Fast Track will continue.
In addition, the government will double support in the high-value sector by providing matching funds to SMEs and mid-cap companies totalling RM200 million from the Strategic Joint Investment Fund.
Meanwhile, Khazanah Nasional and the Retirement Fund Inc (KWAP) are investing RM550 million in the semiconductor ecosystem in an effort to increase collaboration between local firms and multinational companies, while under the National Semiconductor Strategy (NSS), BPMB is providing RM500 million in loans to support high value-added activities such as R&D, especially by local companies supporting the E&E ecosystem.
“GLIC continues to catalyse domestic investments and strengthen the startup ecosystem in the country,“ he said.
The Prime Minister said the efficiency of the logistics sector would also be improved so that economic activities would move faster, be cost-efficient and benefit investors, industry and the people.
The Prime Minister, dressed in a soft blue baju Melayu, also emphasised the government’s efforts to develop a cross-border economy, saying the federal government’s efforts to develop the Johor-Singapore Special Economic Zone (JS-SEZ) had built investor confidence in Johor as Malaysia’s strategic gateway.
“For the first half of 2025, JS-SEZ recorded approved investments of RM37.1 billion, which is 66% of Johor’s total investments, and JS-SEZ secured a further RM29 billion in new investment commitments,“ he said.
He added that the government supports the development of economic activities on the northern border such as Delapan in the Bukit Kayu Hitam Special Border Economic Zone, which is emerging as a modern growth hub connecting the ASEAN supply chain and digital ecosystem with investments of RM2.7 billion.
In ensuring that Malaysia also becomes a major player as a producer of invented products that can penetrate the export market, the government is prioritising the production of artificial intelligence (AI) and fostering research, development, commercialisation and innovation (RDCI) activities.
“The government proposes that an additional 50% tax deduction be given to MSMEs for expenses related to AI and cybersecurity training costs recognised by MyMahir National AI Council for Industry (NAICI) led jointly by Talentcorp and MyDigital.
“A Sovereign AI Cloud will be built by MCMC with an investment of RM2 billion,” he said.
To meet the energy transition agenda, Anwar said the National Energy Transition Roadmap (NETR) has set a target of 70% electricity generation capacity from renewable energy sources (RES) by 2050.
“GLICs and GLCs are mobilising investments worth RM16.5 billion for 2026.
“The Carbon Tax will be introduced starting next year with an initial focus on the iron, steel and energy sectors. To ensure the efficiency of the implementation of the Carbon Tax, its mechanism will also be coordinated with the National Carbon Market Policy and the National Climate Change Bill that will be drafted,” he said.
The government proposes to expand the individual income tax relief of RM2,500 to include the purchase of food waste disposers to promote a sustainable lifestyle. In empowering the bumiputera economy, GLICs and GLCs continue to invest, with RM40 million provided to accelerate the process of scaling up high-potential bumiputera companies.
Meanwhile, following the merger of Ekuinas and PHB under the Bumiputera Investment Foundation (YPB), Ekuinas will develop its investment company to the point where it can be listed and acquired by PNB, while PHB strengthens bumiputera strategic ownership in real estate and key businesses.
“The government is taking an unprecedented step by adding 50 acres of Malay reserve land in Bandar Malaysia.
“Petronas, as the owner of the Bandar Malaysia land, is drawing up a development plan and will begin the development phase by the end of 2026,” he said.
In addition, he said, Subang Airport and the surrounding area are strategic for the aerospace industry with the airport and surrounding area expansion project led by the government and GLC to ensure that national interests and bumiputera participation are prioritised.
Anwar said the Retirement Fund (Incorporated) (KWAP) has provided RM20 million for micro-financing programmes for retirees, empowering entrepreneurship at the community level.
To ensure that the increase in medical inflation is addressed, a total of RM60 million in joint funds from the government and industry have been provided to introduce affordable basic insurance products for all and implement Diagnosis Related Group (DRG).
“Individual income tax relief of up to RM3,000 given on life insurance premium payments or life takaful contributions for oneself and one’s spouse, has been expanded to include children,“ he said.
Regarding the people’s mobility facilities, the Prime Minister said the country’s rail connectivity has been strengthened for the people, such as improving the efficiency of the Kelana Jaya Line LRT through the replacement of 26 new train units at a cost of RM1 billion by Prasarana.
“LRT3 is expected to be operational by the end of 2025. This will connect Bandar Utama, Damansara to Johan Setia, Klang, capable of carrying more than 6,200 passengers per hour in each direction,” he said.
Meanwhile, the Kota Bharu-Gombak ECRL Phase 1 is expected to be completed by the end of 2026, which is expected to reduce the travel time from Kelantan to the Klang Valley to four hours.
For first-time home buyers, Anwar said the government proposes a full stamp duty exemption on transfer instruments and loan agreements for the purchase of a first home worth up to RM500,000, extended for two years, until Dec 31, 2027.
“The government intends to impose a flat rate of stamp duty from four to eight per cent on instruments of transfer of ownership of residential houses by non-citizens and foreign companies, except for individuals with permanent residence in Malaysia,” he said.
The two-hour Budget 2026 presentation covers the efforts of the MADANI Government in raising the ceiling of national growth and the floor of the people’s well-being.
It marks the transition from the reform process to the era of transformation, charting a journey where immediate recovery is replaced by long-term renewal. – Bernama
