KUALA LUMPUR (Sept 23): Budget 2024, to be tabled in Parliament on Oct 13, will be the second budget announced by the unity government. With the conclusion of the recent six state elections, is the administration ready to kick-start more unpopular moves and measures to address the shrinking revenue collection?

Taking our cue from the mid-term review of the 12th Malaysia Plan, Budget 2024 is likely to be an expansionary one. Nevertheless, a long-term solution is needed to enhance revenue sources.

Unpopular moves, such as the reintroduction of the goods and services tax (GST), should be given consideration to rebuild the country’s fiscal buffers to ensure a sustainable economy as well as fiscal and debt levels, according to Lee Heng Guie, executive director of the Associated Chinese Chambers of Commerce and Industry of Malaysia’s (ACCCIM) Socio-Economic Research Centre (SERC).

While the government is worried about the political backlash and the impact on the low-income group, he highlights that those concerns can be mitigated by exempting certain essential items and offering GST vouchers.

Other expected key focus areas under Budget 2024 are the measures to address the income issue and to develop local champions. Deloitte Malaysia country tax leader Sim Kwang Gek is calling for the revival of the Domestic Investment Strategic Fund, whose goal was to accelerate the shift of Malaysian-owned companies in targeted industries into high-value-added, high-technology, knowledge-intensive and innovation-based industries.

In the effort of broadening the tax base, what else can be done? PwC Malaysia tax leader Jagdev Singh points out that the nature of the sales and service tax as a single-stage tax makes it difficult to have its scope broadened without triggering a cascading tax on tax across the value chain.

In an accompanying story, we take a look at which sectors are poised to be the key beneficiaries of Budget 2024.

Read more in our cover story in The Edge Malaysia weekly’s Sept 25 edition.

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