Building On Budget 2024 Gains For A Progressive Malaysia

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From Andrew LimAs we approach the announcement of Budget 2025, there is widespread anticipation. It is a time to reflect on the progress made since Budget 2024, recalibrate our goals, and outline the next steps to propel Malaysia forward, particularly regarding sustainability, economic resilience and social well-being.
Budget 2024: key successes and shortcomingsBudget 2024 introduced several impactful measures aimed at economic recovery and future growth. Among the key achievements were:Support for SMEsSmall and medium enterprises (SMEs), contributing nearly 38% of Malaysia’s GDP, received a major boost in Budget 2024. The RM10 billion SME digitalisation and automation matching grant played a critical role in helping businesses adopt advanced technologies, enhancing productivity and competitiveness.
However, a more streamlined tax system could further support SMEs by reducing administrative burdens, encouraging compliance, and simplifying the tax landscape.
Sustainability initiativesBudget 2024 made strides in promoting the sustainability agenda, with incentives for green investments, renewable energy projects and the development of low-carbon cities. The Low Carbon Cities Framework successfully encouraged more municipalities to adopt green practices.
Building on this, future budgets could enhance support for businesses to integrate sustainability into their operations through clearer incentives, such as tax breaks for investments in clean energy and green technology. A carbon pricing mechanism, for instance, could incentivise businesses to adopt more environmentally conscious practices.
Youth empowermentRecognising Malaysia’s youth population, Budget 2024 allocated RM500 million for upskilling and reskilling programmes, enhancing job opportunities and career pathways for young Malaysians. As industries increasingly embrace digitalisation and automation, these initiatives are critical in aligning education with market needs.
Stronger collaboration between the private sector and educational institutions could ensure that training programmes address the evolving demands of the job market, preparing youth for emerging roles in a digital and sustainable economy.
Despite these positive developments, some challenges remain. Affordable housing, particularly in urban areas, continues to be an issue, with the housing supply still failing to meet demand for the B40 group. Additionally, while tax reforms were introduced, the tax base could be expanded further to capitalise on the growing digital economy.
Expectations for Budget 2025: key areas of focusTo build on the gains of Budget 2024, Budget 2025 should address several critical areas, laying the foundation for a sustainable and inclusive future:
Simplifying and expanding the tax systemA simplified tax system is crucial for improving compliance and supporting business growth. SMEs in particular would benefit from clearer, more straightforward tax policies. Expanding the tax base to include the digital economy is also necessary to ensure that growing sectors, such as multinational tech companies, contribute fairly to national revenues.
Advancing the green economyMalaysia’s commitment to climate goals requires continued focus on green initiatives. Introducing carbon pricing mechanisms, such as a carbon tax, would encourage companies to adopt cleaner practices. Expanding tax breaks for investments in renewable energy and energy-efficient technologies will spur more businesses to adopt green solutions and drive the transition to a low-carbon economy.
Bridging the skills gapWhile upskilling and reskilling initiatives have seen some success, more must be done to align education with industry needs. Establishing stronger public-private partnerships could help bridge this gap, providing young Malaysians with the practical skills needed for today’s job market. Prioritising digital and sustainability skills will help position Malaysia as a leader in the region’s shift towards a green and digital economy.
Addressing housing affordabilityMalaysia’s ongoing housing crisis requires more aggressive measures. Rent-to-own schemes, targeted particularly at young professionals in urban areas, should be expanded. Moreover, public-private partnerships could help streamline the development of affordable housing, addressing supply shortages. With young professionals struggling to enter the property market, this must be a priority in Budget 2025.
Fostering digital transformationAs Malaysia moves towards becoming a high-income nation, digital transformation must remain a priority. Investments in digital infrastructure, especially in rural areas, are necessary to bridge the digital divide. Supporting tech startups and expanding ecommerce platforms will also help drive innovation and job creation.
Incorporating professional insightAs Budget 2025 approaches, it is crucial to consider the recommendations from key industry stakeholders such as ACCA (the Association of Chartered Certified Accountants), which consistently advocates for policies that support sustainable finance, tax transparency, and future-ready talent. ACCA’s global insight, particularly from reports such as 
Green Finance: A Global Perspective and Tax as a Force for Good, highlight the importance of simplifying tax systems, incentivising green initiatives, and fostering skills development to prepare the workforce for future challenges. These insights offer valuable guidance as Malaysia seeks to build a resilient, forward-looking economy.
Balancing ambition with fiscal prudenceWhile bold initiatives are necessary to drive the nation’s growth, it is important to maintain fiscal prudence. Striking the right balance between ambitious policies and managing the national deficit will ensure long-term financial stability. This is especially important as Malaysia navigates both the opportunities and challenges of the global economic landscape.
As we await the unveiling of Budget 2025, there is an opportunity to build on the successes of Budget 2024 while addressing its gaps. With the right policies in place – focused on tax reforms, sustainability, youth development, housing, and digital transformation – Malaysia can chart a course towards a more resilient and inclusive economy. - FMT
Andrew Lim is the Association of Chartered Certified Accountants’ portfolio head of maritime for Southeast Asia.The views expressed are those of the writer and do not necessarily reflect those of MMKtT.

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