Economy of Malaysia

Exports and Imports

Malaysia's exports totaled $270.2 billion, with major export items including electrical and electronic products, palm oil, and natural gas. Imports amounted to $212.7 billion, consisting primarily of intermediate goods, machinery, and chemicals.

Infrastructure

Malaysia boasts a well-developed infrastructure network, with extensive road and rail systems connecting major cities and industrial zones. The country had approximately 2,380 kilometres of expressways and over 1,800 kilometres of railways.

Balance of Trade

Malaysia maintains a trade surplus, with exports exceeding imports. The trade surplus stood at $57.5 billion, indicating a strong export performance and competitive advantage in key industries.

Fiscal Policy

The Malaysian government implements fiscal policies aimed at promoting economic growth and stability. Government spending amounted to 27.5% of GDP, with key areas of expenditure including education, healthcare, and infrastructure development. The country's tax system includes a progressive income tax, value-added tax, and various other taxes on goods and services.

Monetary Policy

The Bank Negara Malaysia is responsible for implementing monetary policy to maintain price stability and support economic growth. BNM uses tools such as interest rate adjustments and open market operations to manage inflation and ensure liquidity in the financial system.

Trade Agreements

Malaysia is party to several trade agreements, including the ASEAN Free Trade Area (AFTA), which promotes regional economic integration, and bilateral agreements with countries such as the United States, China, and Japan. Additionally, Malaysia is a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which enhances trade relations with Pacific Rim countries.

Environmental Regulations

Malaysia has implemented various environmental regulations to address pollution, biodiversity conservation, and sustainable development. The Environmental Quality Act and the National Policy on the Environment are among the key regulatory frameworks aimed at protecting the country's natural resources and promoting eco-friendly practices.

Tax System in Malaysia

Capital gains tax: Individuals in Malaysia are subject to capital gains tax on profits earned from investments. The tax rate ranges up to 30%, depending on the holding period of the asset.
Corporate tax rate: Malaysia imposes a corporate tax rate of 24% on resident companies and 24% on non-resident companies, based on their chargeable income.
Sales tax: Following the introduction of the Goods and Services Tax (GST) in 2015 at a rate of 6%, Malaysia reverted to the Sales and Service Tax (SST) in 2018. The SST rates vary from 5% to 10% on goods and services.
Property tax: Property tax in Malaysia is levied on real estate properties and varies based on factors such as property value and location. Rates typically range from 4% to 16% of the annual rental value.
Payroll tax: Payroll tax, commonly used to fund social security, is deducted from wages and salaries in Malaysia. The tax rates vary based on income brackets.
Tax deductions and credits: Malaysia offers various tax deductions and credits to individuals and businesses as incentives to reduce tax liability. These incentives may include investment incentives and research and development tax incentives.
Tax compliance: Malaysia emphasizes efficient tax collection mechanisms to ensure compliance. The country's tax authorities implement systems and processes to collect taxes effectively and transparently.
Tax burden: The overall tax burden in Malaysia is determined by the aggregate amount of taxes paid by individuals and businesses. This tax revenue contributes to government funding for public services and infrastructure development.