6 Key Highlights of the Malaysia Budget 2016

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When the budget for Malaysia for 2016 was rolled out, it showcased the government’s firm commitment towards reducing its budget deficit as well as taking a long, hard look at the increasing day-to-day costs and expenses of living in Malaysia. Overall, the budgets seems to be quite balanced, with all sections of society seemingly benefiting in some form or another. Of course, one cannot expect it to be exorbitant by any stretch of the imagination, due to the state of the global economy. However, Malaysian Prime Minister Datuk Seri Najib Razak appeared to be quite optimistic about the positive impact the new budget will have on the country. With the central theme of the budget being ‘Prospering the Rakyat’, the government is looking firmly at making Malaysia an economic powerhouse by the year 2020. To understand what the budget has in store for the people of Malaysia, here are 6 major highlights of the 2016 budget.


Increase In Allocation

One of the major highlights of the new budget is the increase in budget allocation as compared to previous years. The budget for 2016 has been allocated a total of 267.2 billion ringgit, which marks a significant increase by approximately 7 billion ringgit from the allocation in 2015.

Infrastructure Improvement

As per the budget for 2016, the government has allocated 28 billion ringgit towards Mass Rapid Transit projects, which is expected to benefit over two million Malaysian residents. A further 67 million ringgit has also been allocated towards the improvement of outer-city bus routes that are crucial for hundreds of thousands of working Malaysians. In addition, a total of 1.6 billion ringgit has been allocated towards the construction of 175,000 homes, in order to make living more affordable.

Impact on Taxes

This was one of the budget components that most people had their eyes on, and for good reason too. However, according to the new budget, it looks like the taxation burden workers and employees in the middle income bracket is set to be eased, but for residents earning anywhere in the vicinity of 600,000 ringgit to 1 million ringgit, tax has been upped to 26 per cent from the previous 25 per cent. Anyone with an income of over 1 million ringgit is also liable to pay increased income tax of 28 per cent.

Improvement in the Health Sector

There are some significant improvements in the health sector areas, with the 2016 budget set to allocate funds towards the construction of five brand new hospitals in places like Pendang, Pasir Gudang and more. The government has also allocated 52 million ringgit towards 1Malaysia clinics with a further 33 new clinics to be launched. The budget also set aside 4.6 billion ringgit for public hospitals, which will go towards expenditure on medicines, vaccinations and medical consumables.

Increase in the Minimum Wage

Malaysian residents will also be thrilled to know that their minimum wage is set to be increased from July 1st 2016. Wage earners residing in West Malaysia can expect an increase in their minimum wage to 1000 ringgit from the previous wage of 900 ringgit, while resident wage earners in East Malaysia can expect an increase to 920 ringgit from the previous wage of 800 ringgit. Civil servants and retirees can also expect hikes in minimum wage as well as pension payouts.


The government has focused on upping the scale of tourism to Malaysia by granting e-visas for residents of seven countries, such as India, the United States and China. This is expected to contribute significantly towards the country’s tourism influx and is also likely to generate approximately 103 billion ringgit for the Malaysian economy.

While this is just a brief overview of what the new budget has to offer, the overall goal seems to be one of constant development and careful economic improvement over a realistic time period. This could very well be a budgetary cornerstone towards making Malaysia a major player among Asian as well as global economies.


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