The Malaysian Budget 2016.

The Budget 2016 defines the 11th Malaysia Plan to achieve Vision 2020 by the Malaysian Prime Minister.
Budget 2016 as defined by the Prime Minister. | Photo by The Edge Financial Daily at

Now, I’m not one to talk about anything political or economical. Because I’m not interested in either topic. But I feel that as a Malaysian, I should perhaps make mention of either topic to show my support for the nation. And because I believe that one day, we can be a better nation too.

The Budget 2016 was tabled and announced last Friday by the Malaysian Prime Minister Datuk Seri Najib Razak. According to him, it was the “most difficult” budget that he has ever put together. I’m not so sure about his statement because every time the Budget comes out, I suppose it will be a tough choice to make about how and where to distribute the country’s finances to improve the state of the economy. It isn’t a decision you make upon waking up one morning while you’re brushing your teeth.

The total allocated for the Budget 2016 is quite a hefty sum. RM273.9 billion has been proposed in the budget for the rakyat (Malay term for the ‘people’), with two thirds of the overall total for operating expenditures of RM215.2 billion and the remaining one third for development expenditures of RM52 billion. Most Malaysians will have the recent 1MDB issue engraved in their minds, and will often ask one another on where is the Prime Minister ever going to come up with that amount for the budget. But we shall not swim so far out into the ocean. Whatever happened, has happened and it is pointless to bring it up again. Besides, we don’t want to be accosted and arrested by the Internal Affairs, do we?

There were advantages and disadvantages of the budget, so to speak. I was informed by friends who saw the live announcement of the budget that most of the Malaysian citizens who fall under the low-income category will benefit more from it this time. Malaysian citizens who fall under the high-income category, especially those who earn RM1 million and more, will be taxed at least 26 per cent and 28 per cent of their earnings next year as a contribution to the nation.

According to OCBC Bank economist Wellian Wiranto, “Despite the adversities, Najib delivered a budget which garnered mixed reviews with some likening it to “Robin Hood” — a fictional character who takes from the rich to give to the poor. This in reference to the increase in personal income tax rates from 25% to 26% for those with an income of between RM600,000 and RM1 million, and from 25% to 28% for those earning above RM1 million in 2016. Such an approach will undoubtedly start to get people talking about a certain Robin Hood quality to it all, but is ultimately taken because the government feels the need to do what it has to do, without resorting to an even more politically costly blanket tax increase for everyone.

Those who fall under the middle-income category, however, may be spared the high tax bracket, but do not gain much special attention either. What little we are surviving on before the budget will have to last us until the next budget comes round. All we can do is hope and pray that the ringgit will start to strengthen and improve itself.

For more information on the Budget 2016, visit You can also subscribe to The Edge Malaysia Business and Investment Weekly here, or download The Edge Financial Daily digital app on your Android or Apple store, and never miss another important financial update again! Trust me, it’s worth it.

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