How will this budget affect you and your family?
Prime Minister Datuk Seri Anwar Ibrahim recently announced the country’s annual budget, Belanjawan 2025, at the Dewan Rakyat on 18th October 2024. In this edition, Ouch! explores the core theme of this year’s annual budget, particularly issues relating to cost of living, healthcare and education. Here are our selected highlights from Belanjawan 2025.
Cost of Living
Belanjawan 2025 has included various measures to alleviate the rising cost of living for Malaysians who are feeling the pinch. The government has announced that it will continue cash assistance programmes alongside other complementary measures to help ease the pressure of the rising cost of living.
- Essential food items will be exempted from Sales Tax. However, Sales Tax will be imposed on non-essential imported premium products such as salmon and avocado.
- The monthly minimum wage to be raised to RM1,700 beginning February 2025.
- Bantuan Khas of RM500 for each civil servant of Grade 56 and below, while civil service retirees, including those without pensions, will get RM250.
- Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) programmes’ allocation raised to RM13 billion:
| Programme | Cash Assistance |
| STR | – Single individuals to receive RM600 – Households to receive up to RM4,600 |
| SARA | – 5.4 million eligible STR households to receive RM100 per month |
Subsidy Rationalisation
The government has decided to streamline subsidies in an attempt to ensure that they reach the most vulnerable group. This shift, while necessary for long-term fiscal sustainability, will likely impact many households as prices of essential goods and services adjust.
- The blanket subsidy for RON95 will be rationalised in the beginning of mid-2025, affecting the T15 income group in the country.
- Reduction of education subsidies for T15 income group with children in full boarding schools (SBP) and tertiary education institutions. Similar targeted subsidies will be extended to healthcare services.
Taxation and Tax Relief
In Belanjawan 2025, tax incentives and reliefs for individuals have been expanded to encourage better financial planning and reduce the tax burden on Malaysian families. These include deductions for medical expenses, education, and lifestyle-related expenditures, helping Malaysians save more and plan for their future.
- Tax relief for a full medical check-up, mental health check-up or consultation, and COVID-19 detection test limited to RM1,000 will be expanded to include the purchase of self-testing medical devices (e.g., glucometer, oximeter, thermometer) and fees for disease detection examinations at clinics or hospitals (e.g., ultrasound, mammogram, pap smear).
- Individual income tax relief on premiums paid for education and medical insurance will be increased to RM4,000 from RM3,000.
- Reduction of cost for deed of assignment for life insurance policy and family takaful certificate given by way of love through the implementation of a fixed rate for stamp duty beginning from RM10.
Healthcare
With an allocation of RM45.3 billion, the Ministry of Health (MoH) received the second highest allocation in Budget 2025, a testament to the government’s commitment to improving our healthcare system.
- Excise duty on sugary drinks will be imposed beginning 1 January 2025, and the revenue from this will be used to improve and expand diabetes treatment and facilities.
- Introduction of Rakan KKM initiative to provide affordable paid healthcare service options, beginning with Cyberjaya Hospital.
- A Cancer Centre in Kuching, Sarawak and a Heart Specialist Hospital in Kota Kinabalu, Sabah will be established.
- First 1,000 Days of Life Initiative for pregnant women for early detection and treatment of Hepatitis B in their babies.
Education
Every year, the government allocates significant resources to improving the education system and ensuring greater access to quality learning. This year, these efforts also initiatives to advocate for a more inclusive education system for PWDs.
- The National Higher Education Fund Corporation’s (PTPTN) education financing funds to prioritise students pursuing STEM fields in higher education institutions.
- Establish 11 new PERMATA Centres for early education of autistic children.
- Expansion of facility upgrade and provide platforms to empower AI for research universities:
- Universiti Malaya (UM) to focus on AI in the medical field to combat fife-threatening diseases such as cancer
- Universiti Putra Malaysia (UPM) to establish the Malaysian Cryptology Technology and Management Centre with NACSA to develop quantum computing to boost readiness against cybersecurity threats
- Universiti Sains Malaysia (USM) to explore AI development in semiconductors
- Universiti Kebangsaan Malaysia (UKM) to lead AI research on language translation to elevate the Malay language as language of knowledge
Belanjawan 2025 introduces a range of measures designed to address core issues affecting Malaysians today while keeping a clear sight of the future. As a takaful startup, Ouch! especially welcomes tax incentives aligned towards healthcare and family protection. Individuals can further optimise their financial planning by investing in takaful products such as Pusara Pro, which not only saves on taxes but also offers peace of mind in times of need. With added investments in healthcare and education, Belanjawan 2025 sets a course towards equipping Malaysians for a more resilient and inclusive future.
Find out more about Pusara Pro by clicking here or download the Ouch! Takaful mobile app from the Google Play Store or Apple App Store today.
Disclaimer: The information in our blog articles and provided by our brand ambassadors/KOLs is for general insights only and not legally binding. We strive for accuracy but cannot guarantee the information’s completeness or reliability. For legal matters, consult official documents or contact an authorised Ouch! representative.