Kuala lumpur: The government’s decision to refrain from introducing new taxes in Budget 2026, while concentrating on subsidy rationalisation and enhancing governance, is perceived as a pivotal strategy to prevent financial leakages and bolster national revenue.
According to BERNAMA News Agency, Assoc Prof Dr Zainizam Zakariya, Head of the Economics Department at Universiti Pendidikan Sultan Idris (UPSI), highlighted that the rationalisation of subsidies and improved financial administration efficiency are projected to save nearly RM16 billion. This approach aims to offset a portion of the deficit without imposing additional tax burdens on citizens.
Dr Zainizam also praised the government’s commitment to investing in human capital, as evidenced by the allocation of RM66.2 billion to the Education Ministry and RM18.6 billion to the Higher Education Ministry. These investments align with the nation’s aspiration to cultivate a highly skilled workforce.
Budget 2026, presented by Prime Minister Datuk Seri Anwar Ibrahim on October 10, was described by Zainizam as realistic and balanced. It underscores the government’s dedication to sustaining economic growth while safeguarding public welfare and reinforcing fiscal governance. He noted that the budget prudently relies on conventional revenue sources, such as income and indirect taxes, without introducing new taxes.
The budget projects an increase in federal revenue to RM343.1 billion, deemed sufficient to cover operating expenditures, reflecting prudent financial management. However, controlled borrowing remains essential to finance development projects.
Zainizam emphasized the government’s commitment to reducing the fiscal deficit to 3.5 percent of GDP, which demonstrates a focus on maintaining a tight fiscal policy and prioritizing domestic borrowing. This strategy can mitigate the risk of ringgit depreciation amid global interest rate fluctuations.
In addition, Prof Datuk Dr Ahamed Kameel Mydin Meera, Deputy Vice-Chancellor of Universiti Sultan Azlan Shah, remarked on the budget’s focus on economic growth and enhancing the well-being of citizens. He stressed the importance of equitable distribution of growth benefits to ensure that the population truly benefits from national progress.
Ahamed Kameel, who also serves as a professor of economics and finance, commended the prioritization of education and health sectors in Budget 2026, with allocations of RM66.2 billion and RM46.5 billion, respectively. He suggested introducing incentives in the health sector similar to those in Singapore, where senior citizens receive credits for walking activities, which can be used to purchase essential goods.
To boost national revenue, he proposed the nationalization of major banks to enable greater economic control, citing China’s resilience to economic shocks due to state-owned banks. Additionally, he highlighted the need to address the profits reaped by private payment systems charging commissions.
On October 10, the Prime Minister presented Budget 2026, themed the ‘Fourth MADANI Budget: A Budget for the People,’ amounting to RM470 billion. The budget focuses on economic resilience and support for small businesses amid ongoing global uncertainty.