On Friday, the finance ministry, Tengku Zafrul Aziz, says Budget 2023 will provide fundamental support to the economy with an allocation of RM372.3 billion. The amount represented has increased by RM40.2 billion compared to the RM332.1 billion allocated last year.
Of the value, RM272.3 billion or 73.1%, will be assigned for operating expenditure, while RM95 billion or 25.5%, will be for development expenditure. The remaining RM5 billion is allocated for outstanding payments of the Covid-19 Fund commitments made in 2022. The revealed smaller budget for 2023 is said to be a warning of the economic slowdown but, with a possible upcoming national election, also announced cash aid and tax cuts.
Budget 2023 Highlights (Source: The Star/BFM)
Tax cut from 21 percent to 19 percent for those in taxable income bracket RM70,001 to RM100,000
Tax cut from 13 percent to 11 percent for those in taxable income bracket RM50,001 to RM70,000
e-Wallet credit worth RM100 for the M40 group with an annual income below RM100,000
RM200 one-off e-wallet credit for 18-20 year olds, and full time students above the age of 21.
Income tax breaks will be expanded to certain dental checks and treatments of up to RM1,000 for self, spouse and children starting 2023.
Small, medium and micro enterprises will get an income tax reduction from 17% to 15% for the first RM100,000.
One-off RM1,000 aid to all registered micro, small and medium enterprise (MSMEs) and registered taxi drivers, to benefit 1 million recipients.
Women returning to work after a career break will be given tax exemptions for income received between 2023 to 2028.
Female recipients of Bantuan Keluarga Malaysia will receive a one-off RM500 cash aid if they have a child in 2023, under Inisiatif CahayaMata Keluarga Malaysia.
Electric bill subsidy up to RM40 for those with income up to RM1,169.
Parents will receive tax relief of up to RM3,000 for preschool and kindergarten school fees for the 2024 assessment year.
100% stamp duty exemption for purchase of homes worth RM300,000, providing savings of RM6,500.
75% stamp duty exemption for purchase of homes worth RM750,000, providing savings of RM15,000.
RM25 million will be allocated to encourage the people to travel domestically, which will go to discounts, vouchers and rebates of up to RM100.
To encourage the use of public transport, the government will maintain the My50 monthly pass initiative in 2023.
Civil servants below Grade 56 will receive a RM700 financial aid. The Hari Raya Aidilfitri financial assistance will be increased to RM600, and paid by March next year.
The Tax Identification Number (TIN) will be put in place to increase tax collection starting from 2023. Malaysian and PR citizens that are 18 years or older will have a TIN automatically and the use of TIN will be compulsory in general stamping documents.
To counter rampant scams in Malaysia, a National Scam Response Centre will be established, with the collaboration of PDRM, BNM, MCMC, NFCC, and financial institutions. The SMS OTP system will be discontinued.