The Institute for Democracy and Economic Affairs (IDEAS) said the review, presented by Prime Minister Dr Mahathir Mohamad in Parliament yesterday, appeared focused on taxes and the increasing costs to business.
IDEAS research and development director Laurence Todd said Putrajaya should instead focus on reducing operation spending, which has been persistently high.
“Overall, it is disappointing,” he said in a statement.
He noted that the government had discussed imposing new digital taxes on online transactions as well as raising taxes and non-tax revenue such as licences, permits, fees and rentals.
However, he said the government needed to clarify the form of the digital tax given the potential impact on that sector of the economy.
He welcomed reforms to strengthen the oversight and performance of government-linked companies but said it was disappointing that Putrajaya had not proposed more radical reforms such as significantly reducing its hold on assets and equities.
He said this could raise revenue and stimulate private sector growth.
He also noted the government’s proposal to reduce development expenditure but recommended that it focus on improving its balance sheet “in a way that raises revenue and maintains the overall level of public investment”.
Todd however praised the government for identifying many of “the right challenges”, including the need to improve human capital and address income disparities.
“The government is pursuing constructive reforms on these issues,” he said.