Tax changes and strengthening economy expected to double Malaysia’s growth rate

Malaysia’s revenue growth is expected to hit 6.4% in 2018, more than double last year’s 3%.

BMI Research indicated that much of this growth will be driven by plans to expand the collection of Goods and Services Tax (GST). This expansion is expected to boost revenue collection and drive higher corporate profits and income tax revenues next year.

But business activity is also improving, according to the Singapore Business Review. A Nikkei Malaysia PMI score of 52 in November indicated accelerated growth in both output and new orders. Employment levels, which rose to 2.1% in September from 1.4% the previous month, likewise pointed to greater business confidence.

Meanwhile, individual income tax revenue, which represents 15% of total fiscal revenues, is projected to increase thanks to the improving growth outlook and should lead to higher wages.

BMI believes that Malaysia will be able to achieve its fiscal deficit target of 2.8% of GDP in 2018, down from last year’s 3%. 

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Malaysia’s revenue growth is expected to hit 6.4% in 2018, more than double last year’s 3%.

BMI Research indicated that much of this growth will be driven by plans to expand the collection of Goods and Services Tax (GST). This expansion is expected to boost revenue collection and drive higher corporate profits and income tax revenues next year.

But business activity is also improving, according to the Singapore Business Review. A Nikkei Malaysia PMI score of 52 in November indicated accelerated growth in both output and new orders. Employment levels, which rose to 2.1% in September from 1.4% the previous month, likewise pointed to greater business confidence.

Meanwhile, individual income tax revenue, which represents 15% of total fiscal revenues, is projected to increase thanks to the improving growth outlook and should lead to higher wages.

BMI believes that Malaysia will be able to achieve its fiscal deficit target of 2.8% of GDP in 2018, down from last year’s 3%. 

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.