Richard Baker is the Sustainability and Climate Change, and Tax director at PwC Malaysia.BUDGET 2026 builds on measures introduced in the previous budget, advancing ESG priorities through a mix of regulatory instruments—most notably a carbon tax—and extended incentives and grants. The package signals a clear policy direction: sustainable practices are being encouraged and, increasingly, required to meet national climate commitments, with participation expected from both individuals and businesses.
Budget 2026 confirms the introduction of a carbon tax in 2026, with an initial focus on the iron, steel and energy industries. There are as yet no full details on the mechanism or pricing, but this announcement is welcome to help align with our nation’s goals and targets. With the introduction of the carbon tax, taxes will be paid locally in Malaysia, and can be
