Selangor Journal Team
SHAH ALAM, Oct 7 — Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz unveiled Budget 2023 with a total allocation of RM372.3 billion, versus RM385.3 billion in 2022, in Parliament today.
From the total figure, RM272.3 billion would be allocated for operating expenditures and RM95 billion for development expenditures. A total of RM5 billion would be under the Covid-19 Fund and a RM2 billion contingency.
The following are the key highlights of Budget 2023:
Malaysian economy
- Economic growth is expected to be moderate in 2023, between 4.0 and 5.0 per cent, compared to 6.5 to 7.0 per cent in 2022
- Services sector is expected to be the main contributor of the projected 5.0 per cent gross domestic product (GDP) growth in 2023
- Construction sector will expand by 4.7 per cent, manufacturing by 3.9 per cent, agriculture by 2.3 per cent and mining by 1.1 per cent
- The Budget 2023’s top three recipients, accounting for 43.3 per cent of total spending, are the Finance Ministry (RM67.2 billion), Education Ministry (RM55.6 billion) and Health Ministry (RM36.1 billion)
- Federal government revenue is projected to fall by 4.4 per cent in 2023 to RM272.57 billion, from a growth of 22.0 per cent (RM285.22 billion) in 2022
- This fiscal deficit is anticipated to drop from 5.8 per cent of GDP in 2022 to 5.5 per cent of GDP in 2023
- In the Medium-Term Fiscal Framework 2023-2025, the fiscal deficit is projected to be consolidated at a gradual pace with the overall balance averaging at 4.4 per cent of GDP
- The government has the option to extend the statutory debt ceiling of 65 per cent of GDP in the medium term after Act 830 expires on December 31
- The average price of crude oil is projected to be US$90 per barrel
Other snapshots
- Resident individual income tax rate is reduced by two percentage points on taxable income between RM50,000 to RM100,000
- Tax savings of up to RM1,000 middle-income group and RM250 high-income group
- Tax rates of 25 per cent will apply to the tax brackets of RM250,000 to RM400,000 and RM400,000 to RM600,000
- Tax cut from 13 per cent to 11 per cent for those in the taxable income range of RM50,000 to RM70,000
- Tax cut from 21 per cent to 19 per cent for the those in taxable income range of RM70,000 to RM100,000
- The Employees Provident Fund (EPF) voluntary contribution limit will be increased from RM60,000 to RM100,000 a year
- Tax exemption for women returning to work for the assessment years 2023-2028
- Social Security Organisation’s (Socso) Self Employment Social Security Scheme (SKSPS) contributions to be made mandatory for all self-employed sectors in stages
- Total holding limit for Amanah Saham Bumiputra (ASB) and ASB2 increased from RM200,000 to RM300,000
- Childcare fees valued at RM3,000 would be exempted from taxes until the assessment year 2024
- Employment incentive under Socso for employers who hire youths aged 18 to 30 who have been jobless for more than three months
- Government to bear 80 per cent of Socso’s contribution to lessen the burden of self-employed individuals
- EPF’s i-Saraan programme extended to 2023; matching contribution increased from RM250 to RM300
- A three-month incentive of between RM600 and RM750 to employers who hire persons with disabilities (OKUs), Orang Asli, ex-convicts and women who are returning to work
- All pupils to receive Back To School Aid regardless of their parents’ income
- An increase from RM1.7 billion in 2022 will result in an allocation of RM2.3 billion to offer school kids a conducive and secure learning environment
- A discount of 15 to 20 per cent for the National Higher Education Fund Corporation (PTPTN) loan repayments from November 1, 2022, to April 30, 2023
- The My50 travel pass initiative to continue, to benefit 180,000 commuters
- Nearly RM1 billion allocation for the welfare of senior citizens, an increase from the RM580 million in 2022
- Aid for paddy farmers to be reintroduced, monsoon season aid of RM200 a month for rubber smallholders.
- A total of RM25 million to provide incentives in the form of discounts, vouchers and rebates to encourage domestic tourism
- Tax relief of up to RM 1,000 for dental work done on oneself, spouse, and children
- Import duty and sales tax exemption on nicotine therapy products in an effort to get individuals to give up smoking
- Flood mitigation projects will get RM700 million, which will be used to update the weather forecast system and construct sabo dams in 46 different areas across the country
- The National Disaster Management Agency (Nadma) would receive RM174 million, and RM400 million will be directed toward year-end flood relief efforts
- RM332 million allocated for sports development
- Main infrastructure projects allocated RM16.5 billion, especially the Pan Borneo Highway, Gemas-Johor Bahru Double Track project, East Coast Rail Link (ECRL), RTS Link and Central Spine Road
