Malaysia’s tax revenue rose 9% to RM129.6 billion in the first half of 2026 from RM119.1 billion in the same period last year, driven by higher corporate income tax collections and sales and service tax revenue.
Deputy Finance Minister II Senator Datuk Seri Liew Chin Tong said the increase was supported by stronger collections from the food and beverage, services, insurance and logistics sectors.
The higher tax collection came as Malaysia’s economy grew 5.7% in the first half of 2026, following growth of 6% in the second quarter compared with 5.4% in the first quarter.
The government is targeting total tax revenue of RM343.1 billion for the full year, with stable macroeconomic growth expected to continue supporting collections.
Liew said the e-Invoice system was also helping to prevent revenue leakages and improve tax collection. The system has been implemented in phases based on companies’ annual sales.
The first phase began on Aug 1, 2024 for companies with annual sales above RM100 million, covering 5,578 taxpayers. It was subsequently expanded to businesses with annual sales of more than RM25 million to RM100 million, more than RM5 million to RM25 million and RM3 million to RM5 million.
Businesses with annual sales below RM3 million are exempt from e-Invoicing, benefiting about 1.1 million businesses, particularly micro, small and medium enterprises. However, 164,435 taxpayers in this category have voluntarily adopted the system.
On GST, Liew said the government was prepared to incorporate positive elements of the tax into the existing SST system, including measures to prevent the cascading effect.
He said reintroducing GST would involve at least 480,000 businesses compared with about 80,000 businesses under SST, while GST would also impose tax directly on consumers.
Liew added that the government would continue efforts to integrate e-Invoicing developed by the Inland Revenue Board with the Royal Malaysian Customs Department’s systems as part of efforts to improve SST implementation.
