14/10/2025

BIZ & FINANCE TUESDAY | OCT 14, 2025

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Charting a more competitive, inclusive and sustainable M’sia

MARC says govt reinforcing fiscal prudence

future of Malaysia’s gig economy increasingly hinges on digital fluency. “For ride-hailing drivers, AI-powered tools are already reshaping how they work, but technology must serve all, not just the technically savvy,“ Anton noted. He said turning Budget 2026’s promises into reality demands strong coordination among regulators, platforms and social agencies. This means lowering entry barriers, simplifying claims, embedding insurance into daily operations and including part-time drivers. Fairness in the digital economy must be built and enforced – and if done right, these reforms can turn gig work from a short-term hustle into a sustainable path to economic mobility. “As a platform committed to fairness, transparency, and inclusion, inDrive stands ready to work alongside policymakers, regulators, and civil society to shape a smarter, safer and more equitable future for all those driving Malaysia’s economy forward. The road ahead is clear. “What matters now is how we travel it and who gets to come along,“ Anton said. PETALING JAYA: Malaysian Rating Corporation Bhd (MARC) views Budget 2026 as building on the government’s steady effort to balance fiscal discipline with growth. The rating agency said the aim of narrowing the deficit to 3.5% of gross domestic product reflects a pragmatic approach that sees fiscal management as much about spending smarter as about raising revenue. The continued emphasis on efficiency and governance reforms, through initiatives such as the Government Service Efficiency Commitment Bill 2025 and the Government Procurement Act 2025, signals the government’s commitment to em bedding accountability and improving the quality of public spending. Group CEO Arshad Mohamed Ismail said the decision to reduce development expenditure to RM81 billion reinforces fiscal prudence and supports the government’s commitment towards efficiency and effectiveness. He said this measured stance also highlights the ever-growing need for private participation in driving national development efforts. “With frameworks such as the Public-Private Partnership Master Plan 2030 already in place, this creates room for the private sector to play a larger role, not just as financiers, but as partners in execution, innovation, and delivery. “Furthermore, we welcome the massive allo cations to develop human capital and infrastructure, with RM63.5 billion allocated to the Education Ministry and RM43.1 billion to the Health Ministry,“ he said in a statement. Arshad said the implementation of e-invoicing in 2026 is another step forward in strengthening Malaysia’s fiscal foundation. Beyond its potential to boost tax collection, it represents a modernisation of the tax ecosystem which promotes transparency, reduces leakages, and encourages greater compliance. “The real test, however, will lie in how smoothly businesses, especially smaller firms, can adapt to the new system,“ he said. At a broader level, Arshad said, Budget 2026 stays the course on Malaysia’s structural trans formation agenda. He said the continued rollout of the New Industrial Master Plan 2030, National Semi conductor Strategy, National AI Technology Action Plan 2026–2030 and Bumiputera Economic Transformation Plan 2035 underscores the government’s intent to push the economy towards higher-value and innovation-driven growth, and also greater resilience. “All in all, Budget 2026 feels measured and realistic. Pragmatically, any budget plan cannot promise a quick fix, but this budget sets a clear tone of continuity, fiscal discipline, and structural intent,” Arshad added.

PETALING JAYA: Budget 2026 focuses on laying the foundation for a more competitive, inclusive, and sustainable Malaysia, consistent with previous Madani Budgets. Ernst & Young Tax Consultants Sdn Bhd Malaysia, managing tax partner Farah Rosley ( pic ) said, beyond targeted tax reforms, the government is advancing a broader fiscal strategy that leverages digitalisation, trans formation and enhanced governance to strengthen public finance and service delivery. “This reflects a commitment to inclusive, technology-driven governance and marks a decisive move away from traditional fiscal management towards progressive and responsive policymaking, where resilience is built not by raising rates, but by raising standards,” she said in a statement. Farah noted that, as widely anticipated, no new taxes were announced, apart from the reiteration of the introduction of the carbon tax, which was announced in Budget 2025. In the past three years, she said, the Malaysian tax landscape has seen significant dividend tax on individuals, the recent expansion of Sales Tax and Service Tax (SST) and the announcement of a self-assessment system for stamp duty from Jan 1, 2026. While no new taxes were introduced, Malaysia’s tax-to-gross domestic product ratio is set to rise in 2026, driven by stronger enforcement, digitalisation and better compliance. Farah noted that the authorities, including the Malaysian Anti-Corruption Commission, Royal Malaysia Police, Royal Malaysian Customs Department and Malaysia Com petition Commission, have already recovered RM15.5 billion since 2023. “The full rollout of e-invoicing and the Digital Audit Hub marks a new era of real-time transparency,” she said, adding that new digital tax stamps and a Centralised Screening Complex will further curb evasion and illicit trade. Moving on, Farah said, Budget 2026 builds on the momentum of the New Industrial Master Plan 2030 and the New Investment developments such as the introduction of a capital gains tax on disposal of shares and foreign capital assets, removal of foreign sourced income exemptions, the rollout of e-invoicing, a 2%

o It’s a decisive move away from traditional fiscal management towards progressive and responsive policymaking, says Ernst & Young expert

Incentive Framework, targeting high-impact sectors such as semiconductors, artificial intelligence, digital economy and energy transition. “The goal is clear – to attract high-value investments and enhance national competi tiveness,” she said, adding that key initiatives include the Asean Business Entity status to boost regional expansion, the Investor Pass for easier talent mobility, and the Single Family Office scheme, which has drawn RM400 million in assets with a RM2 billion target by 2026. “A new outcome-based incentive frame work, rolling out in early 2026, will link incentives to job creation, regional equity, and national priorities,” she said. Touching on the However, details remain limited. “The carbon tax will be aligned with the National Climate Change Bill and the National Carbon Market Policy to ensure smooth implementation,” she said. Malaysia also aims to match global standards, including the European Union’s Carbon Border Adjustment Mechanism, to avoid double taxation. The tax is expected to start at a low rate to minimise inflationary impact and allow gradual refinement. Farah noted that, in support of Malaysia’s broader climate ambitions, Budget 2026 introduced a targeted suite of other sustainability-linked measures. These include the continuation of the Green Technology Financing Scheme (GTFS 5.0) with RM1 billion in financing, and government guarantees of up to 80% for waste sector projects and 60% for other green sectors such as energy, water, transport, and manufacturing. Farah also noted that the Budget also carbon tax, Farah said Budget 2026 reaffirmed plans to introduce a carbon tax in 2026, targeting the iron, steel, and energy sectors.

reinforces the National Energy Transition Roadmap through allocations for solar projects under the Large-Scale Solar Programme (LSS6 – nearly 2GW capacity), the Corporate Renewable Energy Scheme (expected to generate RM3.5 billion in investment) and an additional 300MW quota under the Feed-in Tariff Programme for biogas, biomass and small hydro. In essence, Farah said, Budget 2026 reflects Malaysia’s steady shift towards a smarter, greener, and more resilient economy, prioriting fiscal responsibility while embracing digitalisation, sustainability, and innovation as growth drivers. She added that Budget 2025’s success will hinge not on introducing new taxes, but on “raising standards” through better governance, stronger enforcement, and targeted incentives that position Malaysia for long-term competitiveness in a rapidly evolving global landscape. He said per-trip coverage and income protection should be basic rights, not luxuries. Platforms and regulators must mandate minimum insurance or create a centralised opt-in system – anything less leaves many workers one accident away from financial ruin. “Budget 2026 must go further to ensure that no driver is left behind simply because they chose the ‘wrong’ app,“ he added. Moving on, Anton said the government’s RM7.9 billion investment in technical and vocational education and training, including GiatMARA training for over 13,000 participants, reflects an essential shift from subsistence to sustainability. For gig workers, he said, these training pathways offer more than just certifications. “Instead, they open doors to diversified income, improved service quality, and long-term employability.” Coupled with a RM5.9 billion push into artificial intelligence (AI) and digital transformation, the

Time to turn promises into reality to improve the lot of gig workers PETALING JAYA: The public and private sectors must now close the gap between aspiration and impact, ensuring that all drivers, riders and workers in the gig industry see tangible improvements in their daily lives. hailing drivers under the BUDI95 targeted fuel subsidy reflects a long overdue recognition. He noted that subsidised fuel may ease daily costs, but lasting income resilience requires smarter support. not tied to platform privilege. Just as drivers pay platform commissions per ride, they should have the option to contribute micro-premiums per trip, unlocking short-term protection that aligns with their earning patterns.”

Fuel and maintenance are ongoing expenses, not one-offs. So government aid should come with digital tools such as real-time fuel tracking, cost forecasting, and earnings management to help drivers plan more effectively.

inDrive head of policy and regulatory affairs, Apac, Anton Ambrose ( pic ) said one of the Budget’s most significant shifts is the expansion of social safety nets for gig workers. “Through the enhanced i-Saraan

Anton noted that Budget 2026 falters in one area – making daily, flexible insurance truly accessible, a vital safeguard for ride-hailing drivers whose livelihoods depend on staying on the road. Currently, only drivers tied to major e-hailing operators benefit from limited platform insurance, leaving independent or multiplatform drivers largely unprotected. Anton said this bifurcation leaves thousands exposed to daily risks, accidents, downtime, and sudden medical expenses with no accessible safety mechanism. “Insurance must be embedded into the work,

Plus scheme, e-hailing and p-hailing drivers can now bolster their retirement savings with government-matched contributions of up to RM600 annually – a cumulative RM6,000 across a working life. “This is further reinforced by the Gig Workers Act 2025, backed by government co-funding of up to 70% for first-time registrants. “A RM200 million allocation for Socso contributions signals the state’s commitment to making protection more universal,” he said in a statement. Anton said the inclusion of over 52,000 active -