With the announcement of the new Malaysian Government, the revised Budget 2023 has been tabled on 24 February 2023.
YAB Dato’ Seri Anwar bin Ibrahim, Malaysia’s 10th Prime Minister and Minister of Finance presented the Budget 2023 in the Dewan Rakyat after being elected in Government in the 15th Malaysian General Election.
Latest Budget 2023 Highlights
1. SJKP provision for borrowers without fixed income
Through Syarikat Jaminan Kredit Perumahan (SJKP), borrowers without fixed income are given a guarantee of up to RM5 billion in loan value.
2. Allocations for PPR projects
The government has provided allocations for PPR projects as follows:
- An allocation of RM50 million to replace worn out lifts, with a quotation limit for procurement of elevator maintenance and repair work increased to RM1.2 million instead of RM500,000
- RM15 million to support NGO efforts to hold remedial classes for children who are still dropping out of learning
- RM30 million provided to intensify people’s economic activities such as food companies using the Cloud Kitchen platform under the supervision of Yayasan Hasanah
- Providing internet access to community areas and internet facilities to 40 thousand PPR units, with free internet for 56 selected PPRs
- RM367 million allocated for upcoming PPR projects, benefiting 12,400 potential new residents
3. Development allocations for Sabah and Sarawak
The states of Sabah and Sarawak are to receive development allocations of RM6.5 billion and RM5.6 billion respectively for the development of cities bordering Kalimantan, Indonesia as a step to continue moving the capital of Indonesia to Kalimantan.
This allocation is also provided to in an effort to continue and speed up the implementation of the Pan Borneo Sabah highway and the Sarawak-Sabah Link Road, estimated to involve a total cost of RM20 billion with a length of more than 1,000 kilometers.
4. Development projects
The government also plans to bring forth the following developments as further measures for the economy:
- Johor to become a special financial zone, with a competitive remuneration package to attract international investors and knowledge workers to settle in Malaysia
- Sanglang Port development project in Perlis to handle petroleum cargo and bulk cargo that will add value to the Perlis economy, including the development of a new coastal erosion structure between Kuala Sanglang, Perlis to Kuala Jerlun Kubang Pasu, Kedah
- Proposed development of the main port on Carey Island to support development of international trade, making Port Klang port the main hub for the Southeast Asian region
1. Revised budget allocation
Budget 2023 allocation is revised upwards to RM388.1bil from RM372.3bil budget in October 2022.
2. Reduction of taxable income for SMEs
For the first RM150,000 taxable income of SMEs, the tax rate will be reduced from 17% to 15%, compared to the initial RM100,000 taxable income proposed in the October 2022 Budget.
3. Income tax rate changes
Some changes were made for income tax rates as follows:
B40 and M40 earning RM35,000 – RM100,000: decreased by 2%
T20 earning RM100,000 – RM1,000,000: 0.5 – 2% increase
4. Excise duty for nicotine-induced products
The government plans to impose an excise duty on liquid or gel products containing nicotine used for electronic cigarettes and vaping.
5. Luxury goods tax
The government plans to introduce a luxury goods tax starting this year, with varying limits according to the type of luxury item, such as luxury watches and fashion items.
6. Amended SOCSO Act for pregnant, working women
In order to encourage women to return to work, SOCSO will amend its Act to allow the granting of a grant equal to 80% of the value of the employee’s insured salary with an allocation of RM290 million.
7. Sumbangan Tunai Rahmah (STR)
Households with an income of less than RM2500 are eligible to receive a donation of up to RM2500 depending on the number of children, with an additional donation of RM600 to the poorest STR recipient households distributed in the form of food baskets and vouchers for basic food items.
8. RM200 e-Tunai Belia Rahmah for youths
Youths aged 18 to 20 can claim e-Tunai Belia Rahmah credit amounting to RM200.
9. PTPTN discount and repayment deferment
PTPTN borrowers get to enjoy a 3-month loan repayment discount of 20% starting March 1, 2023.
In order to ease the financial burden of affected borrowers, the Government agreed to defer repayment to borrowers with a monthly income of RM1800 and below for a period of 6 months. Application for this postponement can be made from next March 1.
10. Prasarana’s My50 initiative to continue
The Government continues the My50 monthly pass initiative for the benefit of nearly 180,000 users.
The infrastructure will also pilot the introduction of the myBAS50 Unlimited Travel Pass for the benefit of the people of Johor Bahru who use the non-stop bus service under the SBST Program, alongside its allocation of RM150 million to expand its implementation to the cities of Malacca, Kuching and Kota Kinabalu.
11. Increased EPF contribution for those with savings below RM10k
Members aged between 40 and 54 years old with EPF savings of less than RM10,000 in their Account 1 will receive an increase in their EPF savings contribution Account 1 by RM500.
*You are currently reading the latest updated Budget 2023. You may refer to the previous Budget 2023 tabled on October 7, 2022 here.
Following the reopening of most economic sectors since the end of 2021, the Budget 2023 will be prepared to support Malaysia’s recovery in terms of returning economic performance and the rakyat’s way of life to pre-pandemic norms.
Originally published on IQI Global.