In his speech in the Lower House on Friday afternoon, Mr Tengku Zafrul stressed that the main theme of the budget overall was “strengthening recovery, facilitating reforms towards sustainable socio-economic resilience of the Malaysian family”.
“The outlook for the global economy in the coming year has become more uncertain and challenging, due to geopolitical conflict, global inflationary pressures, tightening of monetary policies as well as the prospect of weak economic growth,” he said.
Here are five key takeaways from Malaysia’s 2023 budget:
1. What’s in it for households and individuals
Even though the overall budget expenditure for 2023 is expected to be lower than the revised 2022 budget, spending for social assistance and subsidies have doubled from just 5.2 per cent to 11.3 per cent of operating expenditure.
It is a move many observers have anticipated given that a general election may be called in the short term.
Tengku Zafrul outlined that low-income families with a household salary of less than RM2,500 will qualify for cash handouts of between RM1,000 and RM2,500 depending on the size of the family. Senior citizens who are single will also receive handouts of either RM350 or RM600.
For middle-income families, they can enjoy lower income tax as there will be a 2 percentage point reduction in tax rate for those in the RM50,001 to RM100,000 tax band.
The tax rate for this income group will be lowered from 13 per cent to 11 per cent and a 2 percentage point reduction for those in the RM70,001 and RM100,000 tax band, from 21 per cent to 19 per cent.
The Government has also allocated RM1 billion to help the poorest group under its existing Malaysian Family extreme poverty eradication programme (BMTKM).
The programme will provide economic opportunities to around 50,000 extremely poor households across the country.
2. What about assistance for small, medium businesses
The government has also reduced income taxes for those in the small and medium enterprises (SMEs) from 17 to 15 per cent for the first RM10,000. This is set to benefit 150,000 taxpayers employed in these firms, said Tengku Zafrul.
He added that the government also plans to extend the stamp duty exemption by up to 100 per cent on loan or financing restructuring or rescheduling agreements until 2024.