Malaysia to Boost Tax Revenue Without New Taxes, Says EY

Malaysia's Fiscal Policy Overhaul: EY Consultants Predict Revenue Boost Without New Taxes Kuala Lumpur, June 11, 2025 – The Malaysian government is poised to implement significant changes to its fiscal system, according to a recent report by Astro AWANI. Ernst & Young (EY) Tax Consultants Sdn Bhd, a leading tax advisory firm, believes these adjustments will lead to increased tax revenue without the need for introducing new taxes. Farah Rosley, a Partner at EY Malaysia, explained that the government's approach involves a gradual expansion of the Goods and Services Tax (GST) scope to include additional service sectors. "This is particularly relevant because Malaysia has a relatively narrow tax base," Rosley noted. The expansion aims to generate revenue from sectors that are currently not fully taxed, especially in the growing service economy. The government's strategy also prioritizes protecting essential goods and services from increased taxation. Rosley emphasized that the government is committed to mitigating the impact on low- and middle-income households. "With the implementation and enforcement of these impactful measures, these steps can help stabilize public finances, reduce reliance on oil-related revenue, and create fiscal space for targeted subsidies or welfare programs to alleviate the increasing cost of living," she stated. The changes are scheduled to take effect on July 1, 2025, and are intended to strengthen Malaysia's fiscal position and enhance social welfare support. This proactive approach demonstrates the government's commitment to sustainable economic growth and social responsibility.