Budget 2026 Balances Fiscal Prudence With Long-Term Growth -- FMM

KUALA LUMPUR, Oct 10 (Bernama) -- Budget 2026 is seen as a balanced one in its broad direction as it continues the government’s fiscal consolidation efforts through deficit reduction measures, said the Federation of Malaysian Manufacturers (FMM).

In a statement, FMM lauded the budget’s aim to reduce the targeted deficit from 3.8 per cent of gross domestic product (GDP) in 2025 to 3.5 per cent in 2026 under the MADANI government’s fiscal responsibility framework.

It said the budget is also satisfactory from a revenue standpoint, with federal revenue projected to increase to RM343.1 billion in 2026 from RM334.1 billion in 2025.

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“This growth will be driven by improved tax compliance through initiatives such as electronic invoicing, self-assessment for stamp duties, and the introduction of digital tax stamps to curb counterfeiting,” it said.

FMM praised the government’s strong commitment to strengthening high-technology, high-value sectors, particularly the electrical and electronics (E&E) and semiconductor industries, through targeted funding and investment initiatives.

This will also enhance local industry capabilities, strengthen domestic supply chains, and accelerate Malaysia’s transformation into a regional hub for advanced manufacturing and technology, it said.

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While the budget rightly focuses on long-term priorities such as digitalisation, energy transition, and green growth, FMM expressed concern that it does not provide stronger support to the manufacturing sector, particularly micro, small and medium enterprises, to invest in innovation.

Meanwhile, in a separate statement, the Malaysian International Chamber of Commerce and Industry (MICCI) viewed Budget 2026 as a positive step towards building a more predictable, competitive, and sustainable business environment.

The chamber commended the government for maintaining a steady course towards fiscal discipline and economic resilience, alongside targeted measures to ease cost pressures on businesses, promote innovation, and sustain Malaysia’s position as a regional hub for trade and investment.

MICCI said the full implementation of the e-invoicing initiative, starting in 2026, along with the introduction of a self-assessment system for stamp duties and the faster processing of tax refunds, reflects a more transparent and business-friendly approach to taxation.

It said the budget reaffirms the government’s commitment to inclusive and sustainable nation-building, and the combination of targeted fiscal incentives, human capital development measures, and enhanced enforcement provisions lays the groundwork for long-term economic strength and stability.

Budget 2026 was earlier tabled by Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim in the Parliament, with a total government allocation of RM419.2 billion.

-- BERNAMA