Ministry of Finance Malaysia (Ministry of Finance / Treasury)

Every ringgit spent by the Federal Government — from the salary of a nurse at a district hospital to interest paid to bondholders in London — passes through one and the same accounting gateway: the Treasury Malaysia. The Ministry of Finance is the ministry that holds that gateway, and since early 2024 it has held it under a set of numerical limits enshrined in law.

This page explains what the ministry actually does: how the Budget is prepared and approved, who heads the Treasury, how large the national debt is and what its limits are, and which departments and agencies sit under it.

What exactly does the Ministry of Finance do?

The Ministry of Finance is responsible for both sides of the nation’s balance sheet: the revenue coming in and the expenditure going out. It formulates fiscal policy, prepares the Federal Budget, manages the raising and repayment of government loans, controls government accounting and the treasury, and oversees the financial management of other ministries, departments and statutory bodies.

It is also the lead ministry for the country’s financial system. Through the agencies under it, the Ministry of Finance oversees the direct and indirect tax authorities, the capital markets, deposit insurance, and public-sector financing. The Public Finance and Fiscal Responsibility Act 2023 (Act 850) — the law that now binds the ministry’s fiscal management — captures this mandate in four principles of responsible fiscal management: ensuring macroeconomic stability, achieving a sustainable fiscal balance, maintaining a prudent level of debt, and managing fiscal risks effectively.

At a glance

Name	Kementerian Kewangan Malaysia / Ministry of Finance (MOF)
Core machinery	Treasury Malaysia (Perbendaharaan)
Minister of Finance	Dato’ Seri Anwar Ibrahim (Prime Minister)
Minister of Finance II	Datuk Seri Amir Hamzah Azizan
Secretary General of Treasury	Datuk Johan Mahmood Merican
Principal fiscal law	Public Finance and Fiscal Responsibility Act 2023 (Act 850), in force 1 January 2024
Latest Budget	Budget 2026, tabled 10 October 2025, total mobilisation RM470 billion
Website	mof.gov.my

The individuals named above are drawn from the official organisation chart in the Economic Outlook 2025; political and administrative appointments can change, so verify the current office-holders at mof.gov.my.

Who heads the Treasury?

There are two levels of leadership that are often confused. The political level is headed by the Minister of Finance — currently held by the Prime Minister himself as Minister of Finance I — assisted by Minister of Finance II Datuk Seri Amir Hamzah Azizan and Deputy Minister of Finance Datuk Liew Chin Tong (who took up the post on 17 December 2025). The civil service level is headed by the Secretary General of Treasury, the senior officer who leads the Treasury Malaysia and chairs many of the boards of financial statutory bodies.

Under the Secretary General of Treasury are three Deputy Secretaries General — for Policy, Management, and Investment — who oversee the Treasury’s core divisions.

Core Treasury division	Role
National Budget Office	Prepares and coordinates the annual Budget
Tax Division	Direct and indirect tax policy
Fiscal and Economics Division	Fiscal analysis, projections and targets
Government Procurement Division	Public procurement policy and governance
Office of the Registrar of Credit Reporting Agencies	Regulation of credit reporting agencies
Statutory Bodies Strategic Management Division	Oversight of statutory bodies

The Treasury also operates the Federal Treasuries of the states of Sabah and Sarawak, as well as the Special Commissioners of Income Tax and the Customs Appeal Tribunal, which hear tax disputes.

Which departments and agencies sit under it?

The structure of the Ministry of Finance is divided into departments, which are part of the civil service, and agencies, most of which are statutory bodies or government companies with their own boards.

Department under MOF	Function
Treasury Malaysia (Perbendaharaan)	Core machinery of the ministry
Royal Malaysian Customs Department (RMCD)	Indirect tax — SST, excise duty, customs
Accountant General’s Department of Malaysia	Government accounting and payments
Valuation and Property Services Department (JPPH)	Valuation of government real property

Agency / statutory body under MOF	Role
Bank Negara Malaysia	Central bank; monetary policy and banking regulation
Securities Commission Malaysia	Regulation of the capital markets
Bursa Malaysia Berhad	Stock exchange
Inland Revenue Board (LHDN)	Direct tax — income tax, stamp duty, RPGT
Employees Provident Fund (EPF)	Private retirement savings
Retirement Fund (Incorporated) (KWAP)	Public-sector pensions
Malaysia Deposit Insurance Corporation (PIDM)	Deposit and takaful insurance
Bank Simpanan Nasional	Savings bank
Labuan Financial Services Authority (Labuan FSA)	Regulation of the Labuan offshore financial centre
Public Sector Home Financing Board (LPPSA)	Housing loans for civil servants
Langkawi Development Authority (LADA)	Development of the Langkawi region (statutory body under Act 423)

Note: The Langkawi Development Authority (LADA) was established as a statutory body under the Langkawi Development Authority Act 1990 (Act 423). The official MOF portal lists it administratively in the “Departments” group alongside the Treasury, Customs, the Accountant General’s Department and JPPH; legally it is a statutory body.

Two agencies here are the ones the public mentions most often because both collect tax: LHDN for direct tax and Customs for indirect tax. Both sit under the same ministry but are separate authorities — see LHDN and Royal Malaysian Customs Department.

How is the Federal Budget prepared and approved?

The Budget is not a speech; it is a multi-month process that ends in a piece of legislation. The National Budget Office coordinates spending proposals from each ministry, the Fiscal and Economics Division projects revenue and growth, and the Minister of Finance finalises the position before Budget Day.

Its path through Parliament looks like this:

1. Tabling (Budget Day). The Minister of Finance tables the Budget speech and the Supply Bill in the Dewan Rakyat. Budget 2026 was tabled on 10 October 2025.
2. Policy stage. The House debates the Budget as a whole, then votes to pass it at the policy stage.
3. Committee stage. The House scrutinises allocations ministry by ministry. It is at this stage, for example, that the allocations for three particular ministries were passed on 10 November 2025.
4. Dewan Negara. After being passed by the Dewan Rakyat, it is sent to the Dewan Negara.
5. Royal assent and the Supply Act. Once assented to, it becomes the Supply Act, which authorises expenditure for that year.

One important constitutional feature: the Supply Bill is a money bill. This means only a Minister may introduce it, it must originate in the Dewan Rakyat, and the Dewan Negara may only delay it — not block it. The details of the Dewan Rakyat’s financial powers under Articles 67 and 68 of the Federal Constitution are explained in Dewan Rakyat and How a bill becomes law.

Where does the money go in Budget 2026?

Budget 2026 is a total mobilisation of RM470 billion, up from RM452 billion in 2025. That RM470 billion figure is not all direct Federal Government expenditure — it includes the investments of government-linked investment companies (GLICs) and public-private partnership projects that do not go through the ordinary budget.

Component	Allocation
Operating expenditure	RM338.2 billion
Development expenditure	RM81.0 billion
Core Federal Budget	RM419.2 billion
GLIC investment	RM30.0 billion
Public-private partnerships (PPP)	RM10.0 billion
Federal statutory bodies and MKD companies	RM10.8 billion
Total overall mobilisation	RM470.0 billion

On the revenue side, the government is targeting collection of RM343.1 billion for 2026, up from an estimated RM334.1 billion in 2025. The gap between revenue and expenditure is the fiscal deficit, which is targeted at 3.5% of GDP for 2026 — down from 3.7% in 2025. That 3.7% figure is the full-year 2025 actual outturn, which beat the original 3.8% target (2024: 4.1%).

How large is the Federal debt, and what are its limits?

When expenditure exceeds revenue, the government borrows to close the gap — and borrowings accumulated over the years become the Federal debt. The debt-to-GDP ratio is the most closely watched measure. By end-March 2026, that ratio had fallen to 63.1% of GDP, from 65.2% at end-2025 — the result of fiscal consolidation that has narrowed the deficit over several consecutive years.

The Federal fiscal deficit has declined in stages: 5.5% of GDP in 2022, 5.0% in 2023, 4.1% in 2024, 3.7% in 2025 (actual figure, beating the 3.8% target), and a target of 3.5% in 2026.

The government cannot borrow at will. Four principal acts govern its borrowing, each with its gazetted instruments and limits:

Borrowing act	Instrument	Statutory limit
Loan (Local) Act 1959 [Act 637]	MGS, MGII	Total of MGS + MGII + MITB not exceeding 65% of GDP
Government Funding Act 1983 [Act 275]	MITB, Market Loans, Project Loans	(included in the 65% of GDP limit above)
External Loans Act 1963 [Act 403]	Offshore borrowing	Not exceeding RM35 billion
Treasury Bills (Local) Act 1946 [Act 188]	MTB	Not exceeding RM10 billion

Note: MGS is Malaysian Government Securities; MGII is Malaysian Government Investment Issues (Shariah-compliant); MITB is Malaysian Islamic Treasury Bills; MTB is Malaysian Treasury Bills. The numerical limits of these three acts are confirmed in the Fiscal Outlook 2026 (Section 4, Chart 1 on p. 151 and Table 4.2 on p. 161), which also records the end-June 2025 actual figures: statutory debt of MGS+MGII+MITB at 63.5% of GDP, offshore borrowing of RM22.8 billion, and MTB of RM2 billion — all within their limits.

These acts bind the government to borrow solely to finance development expenditure and to refinance existing debt — not for day-to-day operating expenditure. The bulk of Federal debt is denominated in ringgit and raised from the domestic capital market; offshore borrowing remains far below the RM35 billion threshold.

What does Act 850 require?

Before 2024, the statutory debt limit was temporarily raised from 60% to 65% of GDP under the Temporary Measures for Government Financing (Coronavirus Disease 2019 (COVID-19)) Act 2020, and the ceiling of the COVID-19 Fund was raised from RM65 billion to RM110 billion to finance pandemic stimulus and economic recovery packages. As part of the post-pandemic reforms, the government introduced the Public Finance and Fiscal Responsibility Act 2023 (Act 850), which came into force on 1 January 2024.

Act 850 changed how fiscal management is reported and limited. It sets fiscal objectives measured by numerical values in its First Schedule:

Fiscal objective (First Schedule, Act 850)	Numerical value
Minimum annual development expenditure (% of GDP)	3%
Fiscal balance (% of GDP)	-3%
Debt level (% of GDP)	60%
Financial guarantees (% of GDP)	25%

Subsection 18(1) provides that total government debt may not exceed the percentage of GDP specified in the First Schedule — that is, the medium-term target of 60%. Note that this is Act 850’s medium-term target, as distinct from the 65% limit still gazetted under the individual borrowing acts; the current ratio of 63.1% is within the 65% statutory limit while heading towards the 60% target. All four of these fiscal objectives — including the 25% of GDP financial guarantee ceiling — are to be achieved over a medium term of three to five years.

Act 850 also establishes a Fiscal Policy Committee (Section 28) to oversee the implementation of fiscal policy, and requires the publication of various fiscal statements including a fiscal risk statement. The purpose, as stated in the Act’s principles, is transparency and intergenerational equity — so that today’s borrowing does not compromise the well-being of future generations.

Decision guide: which agency for your matter?

Because so many of the country’s financial functions are gathered under one ministry, the public frequently contacts the wrong party. Use this mapping:

• Income tax, stamp duty, real property gains tax, e-Invoice → LHDN, not the Ministry of Finance directly.
• Sales and service tax (SST), excise duty, import customs → Royal Malaysian Customs Department.
• Government payments and accounting, Federal financial statements → Accountant General’s Department.
• Private retirement savings (EPF contributions) → Employees Provident Fund.
• Bank deposit protection → Malaysia Deposit Insurance Corporation (PIDM).
• Capital market investment, broker complaints → Securities Commission Malaysia.
• Monetary policy, interest rates, banking regulation → Bank Negara Malaysia.
• Overall Budget and fiscal policy → Ministry of Finance (Treasury).

Common mistakes

“The Ministry of Finance collects tax.” The ministry sets tax policy, but collection is carried out by the agencies under it — LHDN for direct tax and Customs for indirect tax. Sending a tax query to the ministry will simply be redirected.

“The RM470 billion Budget 2026 figure is all government expenditure.” That total is the overall mobilisation, which also encompasses GLIC investment and PPP projects. The core Federal Budget — operating and development expenditure — is RM419.2 billion.

“The national debt limit is 60%.” The 60% of GDP medium-term target under Act 850 is not the same thing as the 65% of GDP statutory limit still gazetted under the borrowing acts. The current ratio may sit between those two figures.

“Bank Negara is part of the Treasury.” Bank Negara is an agency under the ministry but is an operationally autonomous central bank. Policy rate decisions are made by the central bank, not the Minister of Finance.

“The Budget becomes law as soon as it is tabled.” Tabling is only the beginning. The Budget must pass the policy stage and the committee stage in the Dewan Rakyat, then the Dewan Negara and royal assent, before becoming the Supply Act.

What’s next

To understand the two principal tax collectors under this ministry, read LHDN for direct tax and Royal Malaysian Customs Department for indirect tax. For the constitutional mechanism that makes the Supply Bill a test of confidence, see Dewan Rakyat and How a bill becomes law. For the audit role that checks the expenditure authorised by the Budget, see Auditor General.

To verify any figure on this page, refer to the text of Act 850 at mof.gov.my and the annual Budget documents at belanjawan.mof.gov.my.