KUALA LUMPUR, Oct 6 — Malaysia needs tax reform to address a structural decline in its tax revenue-to-gross domestic product (GDP) ratio, which has fallen to 12.7 per cent from 15 per cent 15 years ago, according to the World Bank lead economist Apurva Sanghi.
He said the federal government debt has risen to over 65 per cent of GDP although the fiscal deficit has been contained, however, this would not be enough to bring the debt-to-GDP ratio down to the target of 60 per cent by 2028.
“Federal government debt rose despite the contained deficit and now stands at 65.2 per cent.
“The cost of servicing debt is also increasing, with 17 sen of every ringgit in revenue raised spent on debt servicing,” he told the media during a briefing on October 2026 East Asia and Pacific Economic Update here today.
