Budget 2026 Balances Fiscal Consolidation With Fairness, Competitiveness - ICAEW Members

KUALA LUMPUR, Oct 10 (Bernama) -- Budget 2026 balances fiscal consolidation with fairness and competitiveness, according to Institute of Chartered Accountants in England and Wales (ICAEW) members.

“From subsidy rationalisation and tax reform to small and medium enterprise (SME) incentives and governance, Malaysia’s fiscal credibility ultimately hinges on transparent and effective execution,” they said in a statement today.

The statement quoted ICAEW members David Lai and Tan Chin Teck of BDO Malaysia, Kevin Foo and Elliot Chaw of KPMG in Malaysia, and Chong Yen Ting of Scatec Solar. 

Lai, who is BDO Malaysia head of tax advisory, said subsidy rationalisation was fiscally unavoidable but delivery systems must improve.

He cautioned that relying solely on PADU, Malaysia’s Central Database Hub that consolidates citizens’ income and demographic data, to target subsidies more accurately could exclude eligible households.

Lai suggested combining e-invoicing, income and consumption data for fairer targeting.

Foo, KPMG head of financial services, meanwhile said adopting outcome-based budgeting and integrating data across ministries would strengthen fiscal transparency, reduce duplication and ensure every ringgit delivers measurable outcomes.

On supporting SMEs and innovation, Lai said linking strategic projects such as the Johor-Singapore Special Economic Zone and Industry4WRD incentives with local supply chains could create multiplier effects and broaden gains from foreign investment.

Foo, on the other hand, said Malaysia should pursue “smart tax administration” by leveraging artificial intelligence (AI), the Malaysian Business Reporting System (MBRS) and e-invoicing to enhance compliance, reduce audit burdens and improve taxpayer experience through pre-filled returns and predictive risk profiling.

He also said accelerating digital-asset and fintech adoption with clearer policy signals could help position Malaysia as a competitive international financial hub.

Meanwhile, Chong, who is Scatec Solar senior asset manager, said Budget 2026 advances Malaysia’s National Energy Transition Roadmap (NETR) with an estimated RM60 billion investment pipeline and supports the implementation of the Energy Efficiency and Conservation Act 2024 and the Carbon Capture, Utilisation and Storage (CCUS) Act 2025.

She noted that the staggered carbon-tax framework would begin with heavy emitters, complemented by green investment tax allowances and accelerated capital allowance claims for renewable-energy upgrades and electric-vehicle infrastructure.

Chong said this is positive as affordability remains key for consumers and industry.

-- BERNAMA