The Price of Silence: Why Brunei Can’t Delay the Tax Debate

"Brunei has long avoided personal income tax — but at what cost? As the deficit deepens and Wawasan 2035 draws closer, silence may prove more expensive than reform.”

By Malai Hassan Othman

Bandar Seri Begawan, May 2025: Brunei's fiscal engine is sputtering. With a looming B$2.99 billion deficit and no personal income tax, policymakers are walking a financial tightrope.

The country has prided itself on tax-free salaries and state-funded services. However, as economic pressures mount, this model now feels more myth than miracle.

Online, whispers have turned into questions. Should Bruneians start paying personal income tax? Can the government afford not to introduce it?

Officially, the answer remains unspoken. However, budget shortfalls, weak diversification, and public frustration suggest this may not stay quiet for long.

Brunei’s median salary is just B$960 per month. In 1984, it was ahead of Singapore’s. Today, it lags far behind.

Singapore's average wage is more than four times Brunei’s. Malaysia’s, too, has surpassed Brunei’s lower end by hundreds of dollars.

That stark gap, plus rising living costs, makes the thought of income tax hard to stomach for many.

“If they want our taxes, can they first fix our pay?” says a frustrated contributor in an anonymous thread.

Brunei’s economy still leans heavily on oil and gas, which account for 75% of national revenue. But production has slowed.

Budget documents show deficits in seven of the past ten years. Reserves are helping for now, but no one expects that to last forever.

Second Finance Minister Dato Dr Hj Mohd Amin Liew Abdullah has acknowledged the gap. He calls it a “divergence” from countries with broader tax bases.

“Even with more tourists or homebuyers, it doesn’t necessarily raise government revenue,” he admitted at LegCo.

Running on Fumes

Brunei’s tax system is narrow. No sales tax. No capital gains tax. And no personal income tax.

The few taxes that exist - on companies, cars, tobacco, and imports- aren’t enough to sustain the growing budget.

Calls to raise corporate taxes are met with warnings: businesses may pass costs to consumers or leave altogether.

Meanwhile, the government is exploring public-private partnerships, Islamic finance, and even a stock market. But these take time.

What the Hansards Suggest

The official record is cautious. Income tax has not been openly debated. But hints and hesitations are telling.

In the Hansard dated 8 March 2025, the Finance Minister said: “Other countries have more fiscal tools... we rely on only a few types of taxes.”

On 12 March, he responded to a loophole query: “If everyone structures their companies to avoid taxes, what revenue do we have left?”

Not direct endorsements, but the undertone is hard to miss: Brunei is running out of fiscal runway.

A Glimpse from the Ground: The Cost of Inequality

Hjh Salmah, a retired school clerk in her late 60s, survives on a monthly pension of B$250. She shares her modest home in Tutong with two unemployed grandchildren.

She has never paid income tax - but says she’s already paying in other ways: rising prices, long clinic queues, and grandchildren unable to find jobs.

“If they ask me to pay tax, I want to know what for. Not for more ceremonies. For jobs, clinics, and fair help,” she said.

Her voice mirrors the unspoken fear of many: that if tax is introduced without reform, the poor will pay more, and still live with less.

Everyone Talks - Except the Ones in Power

Across online forums, private group chats, and anonymous threads, the tax debate is alive. But in Parliament? Silence.

The fear: breaking the unwritten pact - oil wealth for tax-free living. But that pact may no longer be sustainable.

Citizens are doing the math. One wrote: “200,000 workers earning B$1,200 a month. A 10% tax would raise only B$288 million. The deficit is ten times that.”

No Taxation Without Trust

It’s not just the numbers. It’s the trust. Bruneians fear taxes will fund unclear expenses, not public services.

“We already pay hidden taxes - road tax, import duties. What do we get in return?” wrote another anonymous commenter.

Without transparency, introducing personal income tax risks public backlash and political tension.

The Real Deficit: Credibility

The public isn’t just wary of taxes. They’re wary of how money is used.

If income tax is to be introduced, it must follow tangible reforms in fiscal transparency, including open budgeting, performance audits, and structured public engagement.

Return on Benefits, Not Investment Alone

One new idea emerging is “Return on Benefits” (ROB). Unlike ROI, which measures financial profit, ROB tracks social outcomes.

That means evaluating spending by how it improves health, education, and equity, not just bottom lines.

It aligns with Brunei’s national philosophy: Malay Islamic Monarchy. But it demands measurable transparency.

Tax, if ever introduced, must be sold not as a burden, but as an investment in the nation’s future.

The Political Price of Tax Reform

Introducing personal income tax wouldn’t just shift finances - it could shift the political equation. Bruneians are beginning to ask hard questions.

If we pay, shouldn’t we have a say? Who decides how our tax dollars are spent? Where’s the accountability?

In many countries, taxes and representation go hand in hand. People expect more voice when more is asked of their wallets.

Brunei’s current model is top-down. But if personal taxation enters the picture, calls for more inclusive, participatory governance will likely follow.

This is the quiet implication behind every anonymous thread, every frustrated whisper: No taxation without representation.

Sharing Power or Protecting the Status Quo?

The deeper question is not about revenue, but about readiness. Is the government prepared to share power, or simply protect its traditional top-down model?

Introducing personal income tax means more than fiscal change. It invites a fundamental shift in the relationship between citizens and the state.

Introducing tax transforms expectations. Citizens will call for a greater say in policies and spending priorities, driving a push for more accountable governance.

If Brunei wants to tax its people, it may also need to trust them more. Power shared is legitimacy earned.

A Regional Mirror: Lessons from Malaysia and Singapore

Malaysia introduced income tax in 1947 under British rule, and today its system includes progressive rates, tax rebates, and active public participation in budget planning.

Singapore, while maintaining low tax rates, pairs its income tax with extensive social services, housing subsidies, and citizen consultations that boost trust in public spending.

Both countries show that income tax can coexist with legitimacy - if it's transparent, fair, and delivers visible returns to citizens.

Brunei can learn from these models if it wishes to balance sovereignty with sustainability.

Faith-Based Fiscal Tools: The Waqf and Zakat Alternative

While personal income tax remains politically sensitive, Brunei holds two powerful, underutilised tools in its economic arsenal: waqf (endowment) and zakat (almsgiving).

Waqf governance isn’t new in Brunei. The Mosque Construction Fund and Yayasan Sultan Haji Hassanal Bolkiah already operate on waqf principles. What’s needed now is policy recognition, scale, and integration beyond religious spaces.

A proposed framework called Waqudgeting - blending spiritual priorities with national spending - classifies waqf contributions like social infrastructure, sustainable livelihoods, and food security. 

Spending is guided not just by urgency, but by spiritual weight: daruriyyat (necessities), hajiyyat (needs), and tahsiniyyat (enhancements).

This approach aligns naturally with Brunei’s national philosophy of Malay Islamic Monarchy. It also resonates with the UN’s Sustainable Development Goals, offering Shariah-compliant answers to modern fiscal dilemmas.

Globally, Indonesia and Turkey have already embedded waqf into development finance. Malaysia’s Waqaf An-Nur clinics and Indonesia’s Waqf-linked Sukuk fund education and healthcare with no tax burden.

Brunei could leapfrog these models. It has the spiritual mandate, institutional capital, and public trust to lead the region in faith-based governance innovation.

Waqf and zakat, if institutionalised under a national framework and connected to CSR-driven public-private partnerships, can ease the pressure to impose tax while enhancing social equity, creating jobs, and reducing public expenditure.

Brunei can go further by linking waqf to Public-Private Partnerships (PPP) for high-impact sectors like food security. Agro-industrial hubs anchored in waqf land could employ youth, support women entrepreneurs, and reduce import dependency - all without new taxation.

Zakat revenue remains inconsistent due to weak enforcement. Legal provisions for business zakat exist, but lack implementation. Formalising this stream could stabilise welfare funding and relieve pressure on public funds.

The “Waqudget” system, already proposed by scholars, classifies spending based on spiritual urgency — daruriyyat(necessities), hajiyyat (needs), and tahsiniyyat (enhancements). This model offers a moral filter for fiscal decisions, grounding budgets in values of amanah (trust) and ihsan (moral excellence).

CSR, too, must evolve from branding to obligation. Under a waqf-linked PPP framework, corporate social responsibility becomes national co-stewardship  - embedding ethical expectations into business conduct. 

Private firms would co-invest in infrastructure, education, and health, aligning profit with nation-building.

This model blends public asset management with spiritual ethics, where dignity, equity, and trust take precedence over profit motives and short-term gains.

When designed with integrity and community participation, waqf and zakat become more than religious obligations - they become economic engines.

A Call to Act with Courage and Conviction

Brunei is at a crossroads. The debate around personal income tax is not just a fiscal question - it's a moral, political, and developmental turning point.

Rather than waiting for a crisis to force change, policymakers have the opportunity to lead. Institutionalising faith-based fiscal tools like waqf and zakat, and opening structured dialogue on tax, governance, and transparency, can reset the social contract without fracturing it.

This is Brunei’s chance not only to fix its fiscal model, but to reimagine it, grounded in barakah, stewardship, and co-responsibility.

It is time to convene a national fiscal reform dialogue - involving economists, religious scholars, youth leaders, LegCo members, business leaders, and civil society - to co-create a Bruneian model that is both spiritually anchored and economically resilient.

It’s not about abandoning Wawasan 2035 - it’s about adapting its path through trust, co-ownership, and a governance model rooted in shared dignity.

Final Thoughts

Brunei’s leaders know the current fiscal model cannot hold forever. The public knows it too.

Whether personal income tax is introduced or not, the time for silence is running out. It’s time for a national conversation. (MHO/05/2025)

 

Rethinking Progress, Reclaiming Purpose

"Progress isn’t always forward. Sometimes, it’s returning to what we’ve forgotten."

As Brunei pursues its national vision, the answers may not lie in more modern plans, but in ancient wisdom. WAQAF, long practised but rarely recognised, could be the missing link between our ambitions and our values. This is a story about rethinking what progress means—and reclaiming the purpose behind it.

“What’s your real take on Wawasan 2035?” asked a thoughtful young friend of mine in a WhatsApp message one evening. 

The question took me by surprise. It was sincere, direct and challenging to answer casually. 

It warranted more than a quick remark. As someone who has observed national plans, policies, and commitments for decades, I felt the need to pause and reflect. 

Just as I began to grapple with that question, a quiet proposal appeared in my chat - a vision paper exploring the potential of WAQAF governance to revitalise Brunei’s national agenda. 

Authored by DMAO, the paper didn't shout; it whispered. Yet, it communicated something many of us have struggled to articulate: Wawasan 2035 is not dead, but it may have drifted from the soul it was meant to serve. 

What follows is not a critique or rejection of Wawasan 2035. It is a reflection - an invitation - to reconsider how we might realign national progress with national purpose.

---

A Proposal Rooted in Our Soil

Interestingly, Brunei already practices a form of waqf without officially naming it as such. 

The Brunei Darussalam Mosque Construction Fund, which has raised over BND 16 million through public donations since 2015, exemplifies the waqf philosophy. 

These funds, voluntarily given, permanently allocated, and transparently managed, finance the construction and maintenance of mosques throughout the nation. 

This demonstrates that the spirit of WAQAF is already alive among Brunei's people - what is needed now is for policy to align with practice, expanding such models beyond mosques to encompass schools, clinics, youth centres, and sustainable enterprises. 

Similarly, Yayasan Sultan Haji Hassanal Bolkiah, established in 1992, serves as a prime example of a WAQAF institution that has long supported education, healthcare, and welfare - independent of government budgets or political cycles. 

The proposal suggests expanding this success to additional areas: schools, water supply, food security, and community clinics, transforming them into what it refers to as Sunken Social Assets.

These are not merely "donations" but investments in public dignity, designed to endure, governed with care.

To explore and strengthen the ideas presented by DMAO, we conducted additional research across international and Brunei-specific studies, including works by the AlBaraka Forum for Islamic Economy, the BITARA Journal, and a foundational paper on Negara Zikir. 

These investigations confirmed the strategic and spiritual relevance of WAQAF as a governance tool aligned with Maqasid Syariah, Brunei's MIB philosophy, and the global Sustainable Development Goals.

---

Introducing the “Waqudget”: Where Spirituality Meets Spending

Imagine a government budget that focuses not just on dollars and cents, but also on spiritual impact and moral return. The proposed “Waqudgeting” system categorises national spending into areas such as:

·       WQ1: Enduring Social Infrastructure (schools, clean water)

·       WQ4: Sustainable Livelihoods (jobs, food, energy)

Each category is ranked by urgency using Islamic legal priorities:

·       Daruriyyat (necessities)

·       Hajiyyat (complementary needs)

·       Tahsiniyyat (enhancements)

This approach encourages spending guided by trust, ethics, and accountability to Allah, infusing barakah (divine blessings) into national development. 

Our research supports that this framework echoes historical successes of WAQAF in the Muslim world, where public assets - schools, hospitals, roads - were financed through community trusts rather than state debt. 

This makes WAQAF not just a moral choice but a fiscally sustainable one. 

Additionally, WAQAF is increasingly recognised as a Shariah-compliant mechanism aligned with the United Nations Sustainable Development Goals (SDGs). 

Specifically, it offers Brunei a homegrown tool to:

·       Address poverty (SDG 1)

·       Ensure quality education (SDG 4)

·       Promote health and well-being (SDG 3)

·       Reduce inequality (SDG 10)

·       Develop sustainable cities and communities (SDG 11)

These align seamlessly with Brunei’s long-term development goals and global commitments under Wawasan 2035.

---

An Islamic Answer to Modern Problems?

Ironically, while WAQAF is deeply Islamic, its logic mirrors China’s use of State-Owned Enterprises (SOEs) to drive development. Brunei could pursue a similar path, but rooted in faith, not ideology. 

This vision embodies what some term Islamic Social Capitalism - a balanced approach between unregulated markets and excessive government control.

In this model, the state entrusts wealth rather than owning or privatising it, ensuring fairness across generations. 

Our deeper exploration of regional practices indicates that institutionalising WAQAF through a national Waqf Authority or integrating it into existing agencies like MUIB could mobilise dormant assets, including underutilised land and endowments, to support the pillars of Wawasan 2035.

---

Why This Matters Now

A clear example of this misalignment is evident in the long-delayed construction of the Mosque and Islamic Learning Centre at Senukoh, Temburong. 

Initiated over a decade ago with an initial projected budget of BND 5 million, it was later revised to BND 3 million after prolonged deliberations and austerity measures. 

Yet, the project still awaits final approval. This delay signifies not just bureaucratic inefficiency, but a governance mindset that sometimes neglects essential duties and responsibilities outlined in Maqasid Syariah, particularly the protection of religion (hifz al-din) and intellect (hifz al-‘aql). 

When communities are left waiting for basic religious and educational facilities, we must ask: Are we budgeting with barakah or merely balancing spreadsheets? 

Many Bruneians feel that Wawasan 2035 has devolved into more of a slogan than a substantive plan. 

Bureaucratic inertia, execution gaps, and an overdependence on oil and gas present critical challenges. 

This proposal does not claim to solve every issue. However, it offers a fresh perspective - one that integrates spiritual conviction with strategic policy. 

It reminds us that development is not solely about numbers; it's about rahmah (compassion), ukhuwwah (brotherhood), and khidmah (service). 

WAQAF, as our research shows, is closely tied to the concept of Negara Zikir, where governance acts as a form of worship and public service is evaluated not just in outcomes, but in sincerity and blessings.

---

What Critics Say and Why It Still Matters

Some may argue, “Don’t bring religion into governance.” Others might label it idealistic or unconventional. 

However, this perspective overlooks the essence of WAQAF. It is not a retreat from contemporary governance; rather, it is an elevation of it. 

In an age when trust in systems is eroding, a model rooted in Amanah (trust) and Ihsan (moral excellence) might be precisely what we require.

---

A Glimpse into the Future

Siti, a 28-year-old teacher in Temburong, shared that her school lacks basic science equipment and still uses textbooks from a decade ago. 

"If our village had a waqf-funded learning lab or even a proper broadband connection, I wouldn't have to ask my students to take turns using my phone for Google searches," she said with a smile. 

Her experience is not isolated. Across Brunei, small entrepreneurs, educators, and caregivers struggle to meet daily challenges that WAQAF could help address - not through subsidies, but through shared, sustainable stewardship.

---

Conclusion: A Call for Dialogue, Not Dogma

When the question "What is your real take on Wawasan 2035?" was posed, I felt uncertain about my response. 

Now, after engaging with the WAQAF proposal and contemplating our national direction, my answer is clearer: We don’t need to abandon Wawasan 2035. We need to reconnect it to our values, our people, and our future. 

If that path includes a model like WAQAF - one rooted in dignity, sustainability, and divine trust - then perhaps, just perhaps, Brunei can lead not by merely catching up to others, but by inspiring them.

To initiate this journey, we could organise a national WAQAF dialogue - bringing together policymakers, economists, religious scholars, and youth to explore how WAQAF can be institutionalised in Brunei. 

This could be followed by a white paper assessing legislation, proposing governance frameworks, and outlining pilot initiatives aligned with Wawasan 2035. 

The time to act is not some distant day - it is now, while trust, tradition, and opportunity converge.

While dialogue and white papers have their place, Brunei no longer needs more justification; it needs a bold leap into implementation. 

As one elder in our community aptly put it, “Luan banyak udah perbahasan ani, buat tia.”(We’ve talked long enough—now let’s act.) 

The roundtable must transcend mere conversation. Its true purpose is to catalyse real implementation - to greenlight pilot WAQAF initiatives, embed them institutionally, and restore the public’s faith that development grounded in our spiritual values is not just feasible, but already overdue. (MHO/05/2025)

 

 

 

 

From Palace to People: Answering His Majesty’s Call

 "Brunei stands at a pivotal crossroads as Vision 2035 enters its crucial final decade. Can the nation collectively rise to His Majesty's call for dynamic adaptation and unified action to navigate uncertain global economic waters, or will challenges in execution delay the promise of prosperity?"

By Malai Hassan Othman

BANDAR SERI BEGAWAN — In a candid and urgent message, His Majesty Sultan Haji Hassanal Bolkiah Mu'izzaddin Waddaullah delivered a striking reminder that Brunei’s ambitious national development agenda, known as Wawasan Brunei 2035, must swiftly adapt or risk faltering amidst global economic turbulence and increasing international economic tensions.

Speaking at the inaugural session of Majlis Tertinggi Wawasan Brunei 2035 at Istana Nurul Iman, the Sultan stressed the importance of "dynamic, flexible, and constantly evolving" strategies. 

He described Brunei’s development blueprint as a "living document" that must respond effectively to emerging global challenges to protect the nation’s economic resilience and social prosperity. 

"In a rapidly changing world marked by uncertainty, preparedness to adapt and respond quickly to emerging issues is essential," he cautioned. 

His message comes at a critical juncture as Brunei navigates a global landscape characterised by unpredictability and economic friction between major powers.

The Sultan also underscored the importance of comprehensive, whole-of-government and whole-of-nation approaches, especially as the country enters the crucial final decade before the 2035 target year. 

"Coordination among agencies and sectors must be strengthened," he declared, "to ensure all parties work together toward common goals." 

The meeting reviewed the Wawasan Brunei 2035 Framework, with a focus on maintaining its relevance and responsiveness to current and future socio-economic challenges. 

He highlighted the necessity for clearly defined National Key Performance Indicators (KPIs) and the effective use of the Wawasan Brunei 2035 Index. 

This integrated approach aims to evaluate policy effectiveness, identify performance gaps, and support informed decision-making and strategic direction.

Analysts noted the significant relevance of the Sultan’s message against the backdrop of Brunei’s struggles to diversify its oil-dependent economy and the slow progress on key performance indicators essential to Wawasan 2035. 

Critics contend that despite good intentions, the government's execution has fallen short of its ambitious policy declarations. 

"Brunei faces genuine threats, particularly from external economic shocks like the ongoing US-China trade war," said a local economist who spoke anonymously due to sensitivities. 

"Our over-reliance on oil revenues and slow economic diversification leaves us particularly vulnerable. The Sultan’s call for urgent, adaptive action is both timely and necessary."

In his speech, the Sultan emphasised that the government alone cannot bear the responsibility of achieving ambitious national goals. 

He highlighted the significance of strong public-private partnerships and urged the non-governmental sector to increase its engagement and collaboration. 

His Majesty's appeal marks a pivotal shift towards inclusive governance, recognising that real progress necessitates a collective effort. 

However, some citizens have pointed out a critical shortcoming in the current approach: insufficient direct involvement and communication with the general public. 

Awang Razali, a concerned citizen, stressed the need for "frequent meetings with the people to clearly and explicitly outline their roles in achieving the vision and mission." 

He added, "It is not enough for plans and programs to appear impressive on paper; practical implementation is what truly matters. Government initiatives are ultimately for the people, who are the real stakeholders. Without regular engagement and feedback, we risk creating uncertainty and misunderstanding."

Public sentiment reflects cautious optimism alongside underlying frustration, driven by concerns over employment stability, rising living costs, and perceived bureaucratic inertia. 

A recent survey indicated that while Bruneians remain hopeful about Vision 2035, many feel that tangible benefits have yet to fully materialise. 

"We’ve been hearing about Vision 2035 for years," noted Muhammad, a young entrepreneur from Bandar Seri Begawan. 

"But what we really want to see now are real jobs, better incomes, and visible progress. The Sultan’s recognition of the need for adaptability gives me some hope, but seeing actual results is what matters most."

Experts warn that Brunei's reliance on imports, especially commodities and technologies from the U.S. and China, makes the ongoing trade tensions particularly concerning. 

With both of these economic giants imposing tariffs and engaging in reciprocal sanctions, the Sultan’s call to continually reassess and adjust Brunei’s development plans is particularly resonant. 

"We must acknowledge that our economy is not insulated," said a trade analyst well-versed in ASEAN economic affairs. 

"The Sultan's emphasis on flexibility and responsiveness is not only prudent—it’s essential. Brunei must expedite efforts to diversify, especially in sectors such as digital technology, logistics, agriculture, and tourism."

The recent meeting underscored the progress of the blueprints, which serve as essential frameworks for implementing development policies and programs. 

Extensive communication efforts are actively being pursued to raise awareness and promote inclusive engagement among all stakeholders, including the general public and the private sector. 

Bridging the gap between policy vision and real-world execution remains a significant challenge. 

Observers emphasise that, beyond the Sultan’s wise counsel, systemic reforms within government processes and accountability structures are necessary for achieving genuine progress. 

"There is still significant bureaucracy," noted a local businessman involved in public-private initiatives. 

"His Majesty’s call must now translate into concrete reforms in governance, transparency, and execution. Otherwise, the Vision remains just that—a vision."

As global economic dynamics continue to shift unpredictably, His Majesty’s latest titah serves as a wake-up call for collective responsibility, rapid adaptation, and genuine reform. 

Brunei’s Vision 2035 now stands at a pivotal crossroads, where the choices made today will profoundly shape the nation's future resilience and prosperity. 

"Brunei must evolve rapidly and collaboratively," concluded the economist. "Otherwise, we risk being left behind." (MHO/05/2025)