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  • Writer's pictureJessica Lee

The Revised Budget for 2023 in Malaysia






Quick Look at the revised Budget 2023 (Belanjawan Madani).

  1. The economy is expected to grow moderately at 4.5%

  2. This year's 3.3% inflation rate is expected to be the same as 2022's.

  3. Domestic & SME electricity tariff prices are maintained at current rates

  4. The government will not implement GST

  5. Introduction of a Luxury Goods Tax, a Capital Gains Tax, and an excise duty on electronic cigarettes and vape products

Individuals

  1. The government also agreed to bear the cost of driving tests for Class B2 motorcycle license, taxi, bus and e-hailing licenses.

  2. Households with less than RM2,500 are eligible to receive up to RM2,500 depending on the number of children. Additional RM600 food basket and food items voucher for the poorest STR recipient households.

  3. RM200 will be credited into the e-wallet for youths aged 18 to 20.

  4. In April 2023, the government will provide Aidilfitri Special Financial Assistance of up to RM700 to all civil servants Grade 56 and below, including those on contract, and RM350 to government retirees.

  5. Pas My50, a monthly RM50 pass for LRT, MRT & Rapid bus use in the Klang Valley

  6. Income tax rate of RM35,000 - RM100,000 is reduced to 2%. Income tax rate of RM100,000 - RM1 million increased from 0.5% - 2%.

  7. Starting March 1, 2023 the government will reduce PTPTN loan repayments by 20% for three months.The government has agreed to delay payments for six months for borrowers earning RM1,800 or less.

  8. RM3,000 tax relief for voluntary EPF contributions. From June 1, 2023 through May 31, 2024, taxpayers who declare unreported taxes will receive a 100% tax waiver.

  9. Medical treatment tax rebate increased to RM10,000 from RM8,000, including RM4,000 for autism, Down syndrome, and particular learning difficulties.

  10. The Insolvency Act 1967 will be amended to enable bankruptcy cases with debts of less than RM50,000 to be discharged more quickly starting from March 1.

  11. The government to help those aged 40-54 with EPF savings of less than RM10,000 in their Account 1 by providing an additional contribution of RM500.

  12. Shariah savings assets under EPF will be fully segregated in 2024 to provide competitive returns to members holding shariah accounts.

  13. The government aims to enact the Consumer Credit Act and set up a consumer credit monitoring board to regulate consumer credit such as “Buy Now Pay Later” schemes this year.

Businesses:

  1. The corporate income tax rate for MSMEs will be reduced from 17% to 15% on the first chargeable income of RM150,000.

  2. Syarikat Jaminan Pembiayaan Perniagaan (SJPP) will provide funding guarantees of RM40 billion on loans dedicated to SMEs.

  3. Matching grants of RM50 million to encourage automation in the agriculture sector by using robotics and artificial intelligence (AI).

  4. RM100 million matching grants for company automation and digitalization. SMEs can get up to RM5,000 for digital business applications including point-of-sale, accounting, and inventory management systems.

  5. Additional funding of RM40 million is to be added to MyCIF for the support of alternative financing methods.

  6. BNM will provide up to RM2 billion in financing to support green technology start-ups and help SMEs implement low-carbon practices.

  7. Khazanah will provide RM150 million to environmentally friendly project development including supporting the carbon market and reforestation.

  8. Extend tax incentives to manufacturing companies that transfer their operations to Malaysia as well as a 15% tax rate for C-suite executives until 2024 to attract investment from companies affected by Covid-19

  9. PERKESO Employment Incentive of RM600 per month for a period of three months for employers who employ 17,000 graduates, especially TVET

  10. Bernas agrees to share 30% of its net profit from rice imports with rice farmers. The government gives various subsidies and incentives amounting to RM1.6 billion to rice farmers. In addition, rice farmers will receive RM200 cash per month for three months, or one season, for a total of RM228 million.

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