The 2013 Budget for Malaysia was announced by Prime Minister Datuk Seri Najib Razak, on Friday 28 September 2012 in Parliament. It was broadcasted live on national television and many tuned in eagerly to catch the live telecast. The theme of this year’s Malaysian Budget is “Prospering the nation, enhancing the people’s wellbeing: A promise fulfilled.”
In an article on the Malaysian Insider, Deputy Prime Minister Tan Sri Muhyiddin Yassin said that the 2013 Budget is realistic, focusing on meeting the needs of all strata of community. This spurred the national dailies to refer to the Budget as “something for everyone,” because the Budget takes into account everyone living in Malaysia, from the common man in the street, to farmers, retirees, business men and women.
Prime Minister Najib, who is also the Finance Minister, says that the new Budget will focus on improving the quality of people’s lives in Malaysia, while ensuring a sustainable economic growth, prudent spending and reduce the country’s fiscal deficit.
According to a report in the Financial Times, the Malaysian Budget “offers a wide range of incentives to strengthen the economy, including an RM6 billion stimulus package, incentives for the finance, tourism and hospitality industries, support for small businesses and tax breaks to help a proposed Kuala Lumpur financial district get off the ground.”
The report also writes that “the budget provided assistance for regional development projects and the fast growing Islamic finance industry, together with cash payments of RM500 to poor households (households earning of RM3,000 or less a month). There were bonuses for 1.3m civil servants and more than half a million public service retirees – a core constituency for the governing coalition and its dominant party, Mr Najib’s United Malays National Organisation.”
The new Malaysian Budget is basically driven to manage the increasing cost of living, and to accelerate economic transformation for Malaysia to achieve the goal of becoming a high-income nation by 2020. According to the Budget, a total of RM251.6 billion is expected to be used in 2013.
A point to note is that ‘sin’ taxes have not been raised. Sin tax refers to the tax imposed on the tobacco and alcohol industries.
Malaysia Budget 2013 – A Few Takeaways:
- Expected Income: RM 208.6 billion
- Expected Expenditure: RM 251.6 billion
- Deficit Forecasted to Decrease as % of GDP: Deficit is forecasted to decrease from 4.5% to 4% of GDP (Deficit represents the amount of expenditure exceeding the income)
- Malaysia GDP Growth: GDP annual growth is planned to expand between 4.5% to 5.5% percent. (GDP is Gross Domestic Product and is one indicator for measuring the size of a country’s economy)
- Malaysia Property Gains Tax: Real Gains Property Tax will increase to 15% from 10% for properties disposed of less than two years after purchase
- Malaysia Alcohol and Tobacco Tax: The alcohol and tobacco tax will remain the same
- Malaysia Subsidies: Subsidies will not be reduced on the widely used RON 95 grade of petroleum
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