Minister of Finance Tengku Datuk Seri Zafrul Abdul Aziz is presenting the much-anticipated national Budget 2023 under the theme of “Strengthening Recovery, Facilitating Reforms Towards Sustainable Socio-Economic Resilience of Keluarga Malaysia” in Parliament today (Friday, Oct 7).
The Government formulated Budget 2023 based on three priority areas:
– Reinforcing the momentum of economic recovery by ensuring it is not just a recovery in GDP terms but also a job and income recovery for Malaysians and businesses;
– Strengthening economic resilience against future shocks through reforms towards better social protection especially of vulnerable segments of society, a stronger public health system, more sustainable fiscal position to provide buffers against future shocks and by undertaking more targeted forms of subsidies and assistance; and
– Implementing comprehensive reforms in the economic and social aspects for businesses, priority sectors and the nation to emerge more competitive globally while advancing its sustainable development agenda.
BT Budget 2023 Live Highlights
Here are the highlights of the Budget 2023 speech based on sectors as they are delivered:
Budget 2023 Allocation
Budget 2023 has a total allocation of RM RM372.3bil, lesser than that of Budget 2022 which carried an allocation of RM385.3bil, which stood as the nation’s largest.
Tengku Zafrul said the top three recipients of Budget 2023 are the Finance Ministry (RM67.2bil), Education Ministry (RM55.6bil) and Health Ministry (RM36.1bil), constituting 43.3% of total expenditure.
Services sector is expected to be the main contributor to 2023 GDP growth, which is anticipated to expand by 5.0% in 2023.
Economy is expected to grow moderately between 4.0% and 5.0% in 2023 versus 6.5% to 7.0% in 2022.
People
Income Tax rate for individuals reduced by two percentage points.
Households with a monthly income of less than RM2,500 with five or more children will get a #BKM one-off aid of RM2,500.
The government may extend the statutory debt limit of 65 per cent of GDP in the medium term after the expiry of Act 830 on Dec 31, 2022.
RM272.3bil allocated for management spending, RM95bil for development, RM5bil under the Covid-19 Fund and RM2bil as contingency savings.
M40 e-Pemula Initiative: e-Wallet credit worth RM100 for the M40 group with an annual income below RM100,000, benefiting eight million individuals.
Tax exemption for women employees on income for the assessment years 2023 to 2028 to encourage them to return from work after a career break.
RM11 million to increase screenings through mammogram subsidy and cervical cancer screening.
Electric bill subsidy up to RM40 for those with income up to RM1,169.
Monthly aid from Social Welfare Department totaling RM2.5bil to benefit over 450,000 households.
Bantuan Keluarga Malaysia (BKM) increased to RM2,500 for families with 5 children and above; RM1,000 to RM2,000 for families with 4 kids and below.
Seniors and singles to receive between RM300 and RM600.
EPF voluntary contribution limit will be increased to RM100,000 per year compared to RM60,000 previously.
Those in RM250,000-RM400,000 income tax range together with the RM400,000-RM600,000 range will be subject to a 25% tax rate.
Government will subsidise costs of obtaining operating licenses for taxi, bus and e-[hailing through the MyPSV initiative.
Government sets aside RM10mil to subsidise the cost of obtaining Class B2 motorcycle licences through the Skim Tekum MobilePreneur programme.
Total holding limit for ASB and ASB2 increased to RM300,000 compared to RM200,000 previously.
MY50 monthly pass initiative for public transport users, set to benefit close to 180,000 users
RM209 million allocation for air travel subsidy for rural Sabah and Sarawak.
The MyStep programme will provide 50,000 jobs including 15,000 in the public sector and 35,000 in GLCs.
It will involve RM150 million and is expected to benefit 70,000 job-seekers.
The government will hold Keluarga Malaysia sales offering essential items at more affordable prices.
RM200 million to subsidise logistics costs for the distribution of essential goods.
RM10 stamp duty for properties transferred between family members.
RM45 billion Semarak Niaga funds for entrepreneurs.
One-off RM1 billion grants to all registered MSMEs and taxi drivers. To benefit one million recipients.
RM28 million to upgrade prison staff quarters.
RM42 million to upgrade police quarters.
RM118 million for the maintenance of armed forces homes.
RM485 million for the maintenance of all MMEA ships and boats.
RM431 million to procure new assets for the police.
RM17.4 billion for the defence ministry, including RM4 billion for the purchase of new military assets.
Petronas to contribute RM2 billion to the National Trust Fund (KWAN).
RM734 million for MySalam programme. This will benefit 1.5 million people from the B40 group.
RM80 million for Socso health screening programme.
RM80 million for the PEKA B40 programme.
The government has allocated RM305mil for youths under BSN and Mara to take loans of up to RM50,000 to start businesses. Over 10,000 youth expected to benefit.
Over 400 million in allocation for Nadma.
RM500 million to widen rivers in Kelantan.
RM2 billion to build retention ponds.
RM562 million to implement the Sabo dam project.
RM15 billion for flood mitigation initiatives.
RM56 million to support sustainable farming.
GLCs and GLICs to invest up to RM50 billion in 2023.
Government to table consumer credit bill in second quarter of 2023.
RM73 million to enhance cybersecurity.
Government to set up a national scam response centre.
RM20 million in grants for community associations to assist in natural disasters.
RM100 increment for all civil servants between Grade 11 to Grade 56.
Special leave for over 500,000 teachers.
RM100 subsidy for civil servants for insurance coverage.
RM20 million to set up urban transformation centres (UTC).
RM50 million to boost Bumiputera commercial property ownership.
Tax incentives to attract investors.
EPF to invest RM45 billion in the domestic market.
RM330 million for electric vehicle (EV) infrastructure.
Housing
Stamp duty discounts of up to 75% for houses worth between RM500,000 to RM1 million.
Stamp duty discounts of up to 75% for houses worth up to RM1 million.
RM367 million to build people’s housing projects (PPRs), to benefit 12,400 new residents.
RM367mil allocated for People’s Housing Projects in urban areas, including new projects in Marang, Terengganu, and Arau, Perlis, which is set to benefit 12,400 people.
Some 4,250 housing units worth RM358mil will be built under Rumah Mesra Rakyat programme.
Education
Education Ministry gets the biggest slice of the pie in Budget 2023 with RM55.6bil.
RM1.2 billion to repair and upgrade dilapidated schools particularly in Sabah and Sarawak.
RM825 million allocation for #BAP Bantuan Awal Persekolahan. RM150 for each student, an increase from RM100 previously.
RM1.2bil allocation to upgrade dilapidated school buildings and infrastructure, especially in Sabah and Sarawak.
RM777mil allocated for the Supplementary Food Plan (RMT) to ensure that students get daily nutritional content, benefiting 800,000 students. RM3.50 per pupil in the peninsula and RM4 in Sabah and Sarawak.
PTPTN loan repayment exemption for degree students who graduate first class.
PTPTN borrowers who settle their loans in full will receive discounts of up to 20 per cent.
Borrowers who pay at least 50 per cent of their loan or make scheduled direct debit payments will receive a 15 per cent discount.
The discount for repayments will begin from Nov 1, 2022 to April 30, 2023.
RM188mil to increase early childhood education programmes for children. 10 more Taska under Kemas will be built. This will also help mothers get back into the workforce. Allowances for Taska staff will also be upped.
RM2.3 billion to ensure students have a conducive and safe learning environment.
All students to receive RM150 in education aid.
RM180 million to fund TVET training, benefitting 13,000 trainees.
RM6.7 billion for TVET training and education.
RM6.6 billion for Bumiputera education loans
RM3.8 billion for scholarships and education loans.
RM15.1 billion for the higher education ministry.
RM430 million to construct five new schools in Sabah, Sarawak, Terengganu, Cyberjaya and Selangor.
RM1.1 billion to repair and maintain all schools, including vernacular and religious schools.
RM20mil and 3,000 trainers allocated for National Dual Training System (SLDN)
Discounts for PTPTN borrowers who achieved first class bachelor’s degree if they make payment from from Nov 1, 2022, to April 30, 2023.
RM100 increase in living allowance for JPA scholars and officers in the country.
RM6.6bil allocated for education facilities for Bumiputera children in Mara, Yayasan Peneraju and UiTM.
RM10mil allocated for green campus initiative in public universities.
Socso
Socso Mobility Assistance
Socso to provide RM1,000 mobility assistance for employees from Sabah and Sarawak with jobs in the peninsular and vice versa.
All self-employed workers must contribute to Socso.
RM150mil allocated for employment incentive, RM600-RM700 a month for three months for marginalised groups such as the disabled (OKU), ex-convicts, Orang Asli and women to rejoin the workforce.
Government will bear 80% of the Socso contribution. Food delivery personnel, farmers, fishermen, artistes under Finas and hawkers need to contribute only 20% of the total contribution. This will be further expanded to gig economy workers and taxi drivers.
Socso to provide RM1,000 mobility assistance for employees from Sabah and Sarawak with jobs in the peninsular and vice versa.
Government will make SOCSO’s SKSPS contributions mandatory for all self-employed sectors in stages.
Socso to provide incentives for employers to hire the disabled, Orang Asli, ex-convicts and women returning to work. The incentive worth to RM750 a month will be given for three months per employee.
Family
One-off RM500 cash aid for mothers from households receiving Bantuan Keluarga Malaysia who gives birth in 2023.
Agriculture and Food Security
RM10mil allocated for AgroPenjara programme involving convicts going into agricultural activities and involving 70ha of land in Malaysian prisons.
RM256mil for rainy season assistance for rubber smallholders will benefit some 320,000 farmers.
RM1.8bil allocation for subsidies and incentives for paddy farmers, fishermen and smallholders.
Government to introduce an agriculture protection scheme.
RM228 million in aid for padi farmers. This will benefit 240,000 people.
Additional tax deductions for employers who hire former residents of juvenile detention centres.
RM1 billion to fund agro-food programmes.
RM56 million to support sustainable farming.
Tourism
RM10 million for ThinkCity initiative in Kuala Lumpur.
RM500 million in tourism financing from Bank Negara Malaysia (BNM).
RM25 million in incentives to promote domestic tourism.
RM10 million to promote eco-tourism.
Guarantee for SMEs up to RM9 billion.
New chartered flights to and fro East Asia and Middle East.
RM90 million in grants to promote tourism activities.
RM200 million to promote tourism recovery.
RM200mil allocated for tourism sector.
RM90mil allocation to boost tourism and tourism activities including for chartered flight services, especially from the Middle East and East Asia.
RM25mil for domestic tourism which includes discounts, vouchers and rebates of up to RM100.
RM90mil for travel promotion matching grant (Geran Padanan Galakan Melancong, Gamelan) for promotional campaigns and marketing as well as tourism programmes such as international sports events.
RM20mil for Malaysia Healthcare Travel Council to promote the country as a premier healthcare travel destination.
Health
RM10 million to purchase 3D printing machines for dental health services.
Government to set up mental health centre of excellence.
RM1.8 billion to build new healthcare facilities and purchase new medical equipment.
RM420 million to repair dilapidated hospitals and clinics.
RM4.9 billion to increase capacity for public healthcare.
Government to continue measures to combat the illicit cigarette trade.
Government to introduce qualified domestic minimum top-up tax.
Government reiterates implementation of Tax Identification Number to widen tax base.
Government to introduce e-invoice similar to initiatives in France and Brazil.
RM20 million to promote Malaysia as a medical tourism destination.
Allocations to treat rare diseases increased to RM25 million.
Income tax
Income tax for Small and Medium Enterprises (SME) will be reduced from 17% to 15% for the first RM10,000 earned and set to benefit 150,000 tax payers from SME businesses.
The government plans to extend the stamp duty exemption by up to 100% on loan or financing restructuring or rescheduling agreements until 2024.
Small and medium enterprises (SMEs)
Up to RM9bil through business financing guarantee companies to enable to SMEs to get financing.
2% reduction in income tax of micro-SME operators.
RM10bil from Bank Negara Malaysia for SMEs for automation, digitalisation, tourism and agriculture.
RM45bil for Semarak Niaga Keluarga Malaysia
RM228mil assistance to benefit 240,000 paddy farmers.
RM1bil to fund RM1,000 one-off grant for registered SMEs and registered taxi drivers, to benefit one million people.
Defense
RM118 million for the maintenance of armed forces homes.
RM485 million for the maintenance of all MMEA ships and boats.
RM431 million to procure new assets for the police.
RM17.4 billion for the defence ministry, including RM4 billion for the purchase of new military assets.
RM28 million to upgrade prison staff quarters.
RM42 million to upgrade police quarters.
RM100 million to support development of local technology companies.
RM510 million to improve road infrastructure to Pengerang.
Government will provide special incentives for investors in the chemical and petrol chemical industry.
Tax incentives and RM50 million to support development of aerospace components.
Tax incentives for local pharmaceutical companies has been extended.
RM20 million in matching grants to support development of local products.
Government to provide incentives for multi national companies to establish operations in Malaysia.
Aidilfitri aid for civil servants increased to RM600.
RM350 one-off aid for one million retired civil servants.
One-off RM700 special aid for 1.3 million civil servants under Grade 56.
RM10 million to support the made in Malaysia campaign.
RM15 million to support local franchises.
Government to support automation initiatives in the plantation sector.
RM70 million to support the Malaysian Sustainable Palm Oil (MSPO) certification programme.
RM40 million to encourage small holders to diversify their crops.
RM315 million to rubber planting programmes.
De Rantau programme to support professional mobility.
RM50 million allocated for Cradle Fund.
RM16.5 billion for major transport infrastructure projects.
RM50.2 billion for MRT3 project.
RM11.4 billion for maintenance and repair of existing government buildings.
RM92 million for development of the halal industry.
RM472 million to improve rural electricity infrastructure.
RM2.55 billion for Sabah and Sarawak.
RM1.5 billion to improve transport infrastructure in Sabah and Sarawak.
