RM372.3b - Finance minister unveils biggest budget ever

Finance Minister Tengku Zafrul Abdul Aziz tabled Budget 2023 in the Dewan Rakyat this evening.

The budget is themed "Strengthening Recovery, Facilitating Reforms Towards Sustainable Socio-Economic Resilience of Keluarga Malaysia.”

This is the last budget for the 14th Parliament ahead of the next general election, the timing of which remains uncertain.

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READ MORE: Budget 2023: The big picture

‘We survived two years of uncertainties’

6.10pm: Concluding his budget speech, Zafrul says although the past two years were full of uncertainties, Malaysia managed to weather them.

"Today, the streets are jammed again and our children are in school. Our borders are busy.

"Now, we are facing global factors but the government will remain steadfast and will support those who need it," he said.

Unlike previous years, the finance minister encountered little heckling from the opposition.

Encouraging EV adoption

6.00pm: The government is rolling out several incentives to encourage the use of electric vehicles (EV).

This includes extending excise tax and import duty exemptions for imported EVs until end-2024.

The approved permits fee for EVs will be exempted until end-2023.

Finally, manufacturing of EV charging equipment will qualify for 100 percent tax exemption for the assessment year 2023 to 2032.

Development funds for Sabah and S’wak up

5.55pm: Sabah and Sarawak have been allocated RM6.3 billion and RM5.4 billion respectively in development funds. This is an increase of 21.15 percent and 17.39 percent respectively.

The funds will be spent on infrastructures for water, electricity, roads, healthcare and education.

MRT3 project to cost RM50.2 billion

5.45pm: The MRT3 project will cost RM50.2 billion.

At 50.8 kilometres, the project will cost nearly RM1 billion per kilometre.

Phase 1 is expected to be completed in 2028 and Phase 2 in 2030.

The government is expected to spend RM3.3 billion on this project next year.

Goodies for civil servants

5.35pm: The government will decrease financing cost for civil servants purchasing computers and smartphones to two percent per annum, down from four percent.

Teachers who have served more than 10 years will qualify for a special leave of 15 days, up from five days. This is expected to benefit 500,000 teachers.

All civil servants from Grade 11 to Grade 56 will receive a special RM100 raise.

All civil servants below Grade 56 will receive RM700 in cash handouts while retirees will receive RM350.

Aidilfitri bonus for civil servants has been set at RM600. This means some civil servants can receive up to RM2,500 next year.

Petronas to pump RM2b into Kwan

5.25pm: Petronas pledges RM2 billion for the National Trust Fund (Kwan).

Petronas is Kwan's sole contributor. Up until the Covid-19 pandemic, it was only tapped once for Projek Malaysia Wetland Sanctuary in Ulu Langat.

In 2021, Putrajaya drew RM3.3 billion from Kwan to finance Covid-19 vaccines.

READ MORE: What is the National Trust Fund (Kwan)?

Tax exemptions for medical checks, dental treatment

5.22pm: Tax exemption for medical treatments will include health check-ups and dental treatment.

The maximum exempted amount is RM1,000 for the year 2023.

RM36.1b shot in the arm for Health Ministry

5.20pm: The Health Ministry's budget will be increased by 11.4 percent to RM36.1 billion.

Tengku Zafrul explains that Covid-19 is still a problem and hence the nation's public health capacities must be improved.

The government will also provide tax exemptions on nicotine replacement therapy products to encourage smokers to kick the habit.

Fiscal responsibility bill to be tabled 'this year'

5.15pm: Barring unforeseen circumstances, the government will table the Fiscal Responsibility Bill 2022 during the current Dewan Rakyat meeting.

Tengku Zafrul is unable to hide his smile when making this announcement, leading some to speculate that Parliament will be dissolved soon for GE15.

The bill is aimed at increasing the transparency and accountability of the nation's fiscal management.

READ MORE: Fiscal Responsibility Act may require statutory limits on contingent liabilities

Revitalising tourism industry

5.10pm: Travel agencies that handle 200 foreign tourists or 400 domestic tourists will be eligible for 100 percent tax exemption.

Tourism operators who need to procure cars or buses are eligible to a 50 percent excise tax discount if they buy CKD (completely knocked down) vehicles.

No stamp duty for loan restructuring

5.00pm: The government intends to implement a 100 percent exemption for stamp duties for all bank loan restructuring exercises for businesses until 2024.

This is among the government's measures to help businesses get back on their feet.

Micro, small or medium enterprises (PMKS) will see a tax reduction between two percent and 15 percent on the first taxable RM100,000.

Flat rate stamp duty for property transfer between family members

4.50pm: From 2023 onwards, property deed transfers between family members will cost a flat rate of RM10.

Currently, such deed transfers are subjected to a 50 percent discount.

Zafrul explained that the new policy was implemented because the "love between parents and child cannot be halved".

PTPTN repayment discounts

4.45pm: The government will be offering a discount for National Higher Education Fund (PTPTN) loan repayments over a six-month period beginning Nov 1 this year. The tiered discount offer is as follows:

Full settlement - 20 percent discount

Half settlement - 15 percent discount

Enrol for repayment via automatic salary deduction - 15 percent discount

Those who graduate with first-class honours will be exempted from repaying their PTPTN loans.

Helping disadvantaged students

4.42pm: The early school aid (BAP) program, which was previously only for students from families earning below RM3,000, will be given to all students regardless of their families’ income status in 2023.

The amount has been increased to RM150 from the previous RM100, and there will be no cap on the number of children per family to qualify for this scheme. Payments will be made in January.

“Hopefully this can lighten the burden of parents who have schooling children,” Zafrul said.

Hiring incentive for marginalised groups

4.40pm: The government will continue the hiring scheme to encourage employment of marginalised groups.

This includes people with disabilities, former convicts, Orang Asli and women who are rejoining the workforce.

Employers will be able to claim between RM600 and RM750 for three months under this scheme.

Under the Sukacita scheme, Perkeso will provide a RM500 incentive for those seeking employment in other states. The incentive is RM1,000 for those travelling to East Malaysia and vice-versa.

Voluntary EPF contribution cap increased to RM100k

4.37pm: Voluntary EPF contribution will be increased to RM100,000 per annum, up from the current RM60,000.

Tengku Zafrul says this is necessary to help Malaysians with their retirement savings.

Socso for gig-workers

4.35pm: Gig-workers will enjoy an 80 percent government subsidy on their Social Security Organisation (Socso) contribution.

This is part of the government's efforts to ensure all labour sectors are covered by Socso.

This is part of the government's efforts to make Socso contribution mandatory for the entire labour market in stages.

E-wallet credit for youths

4.30pm: Those aged 18- 20 and full-time students over 21 will be able to claim RM200 in their e-wallet under the ePemula programme.

Benefits for mothers

4.28pm: Mothers who qualify for the Bantuan Keluarga Malaysia scheme will be able to claim RM500 in cash if their child is born in 2023.

This is to address the drop in fertility from 4.9 child per person to just 1.7 child per person.

Tax exemption for childcare has been increased to RM3,000.

RM100 e-wallet credit for M40

4.25pm: Those in the M40 category (under RM100,000 annual income) can claim RM100 in e-wallet credit. This will benefit eight million people.

Personal tax cuts

4.20pm: Those in the RM50,001 to RM100,000 tax band will be eligible for a 2 percent reduction in taxes. The government expects 1 million taxpayers to benefit from this initiative.

Cash handouts for low-income families

4.15pm: Families with a household income of less than RM2,500 are qualified for cash handouts. The amount depends on the size of the family.

More than five children: RM2,500

Between 1 and 4 children: RM1,000 to RM2,000

Senior citizens who are single: Either RM350 or RM600

Those who are on the e-Kasih list will receive RM40 subsidy for electricity.

GDP expected to grow 4.5 percent-5 percent

4.12pm: The government expects a GDP growth of 4.5 percent to 5 percent next year. Tengku Zafrul attributes the "moderate" growth estimate to global headwinds.

Biggest budget ever

4.00pm: Budget 2023 is RM372.3 billion, up 12 percent from the previous year and is the largest budget on record.

Total budget for 2023: RM372.30 billion (↑ 12 percent, 2022: RM332.1 billion)

Operational expenditure: RM272.3 billion (↑ 16.6 percent, 2022: RM233.5 billion)

Development expenditure: RM95.1 billion (↑ 26.8 percent, 2022: RM75 billion)

Projected deficit for 2023: 5.5 percent (2022: 6 percent [estimate])

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