The government will prioritise raising wages before expanding the tax base, signalling a shift toward easing household pressure amid rising living costs. Deputy Minister Akmal Nasrullah said policies must first ensure income growth keeps pace with inflation, especially for lower- and middle-income groups.
Malaysia wages vs taxes policy shift cost of living relief plan
He stressed that broadening taxation without strengthening incomes risks deepening financial strain. The administration is instead focusing on targeted wage interventions, productivity-linked pay frameworks and sector-specific reforms. The approach aligns with ongoing efforts to stabilise purchasing power while maintaining fiscal discipline.
Economists say the sequencing is critical. Raising wages first could stimulate consumption and reduce inequality, but may pressure businesses if not matched with productivity gains. The government appears to be balancing both ends—supporting workers while avoiding shocks to industry competitiveness.
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