To be fair there have been some positives lately.
1. Transport Minister Anthony Loke cancelling the need to display road tax tags on car windscreens is a positive. It should be extended to commercial vehicles as well. I hope this is a precursor to completely abolishing road tax. Or restructure it – for example only cars above 200 HORSE POWER pay road tax.
2. The decision by the government to automatically grant citienship to babies born overseas to Malaysian mothers is a long overdue amendment. I hope there is a proper follow through with the lethargic “guardians” of the status quo in the Civil Service. We do not want the government deciding on a policy but the Civil Service dragging their feet on implementing them.
3. The decision to raise the minimum threshold for bankruptcy to RM50,000 is also a positive. But this is not really a fully helpful solution. It would be better to allow people who have been declared bankrupt (at any threshold) to still be able to open bank accounts, possess passports to travel overseas, register new companies and businesses etc. The bankruptcy is tied to a man’s creditors. But depriving a person from being able to open a bank account, use his passport, register new companies and businesses will simply deprive him of reorganising his life and moving on. Granted he had financial troubles but why cut off his oxygen as well?
Budget 2023 – Part 2
Budget 2023 is themed ‘Developing Malaysia Madani’ which involves an allocation of RM388.1 billion with RM289.1 billion for operating expenditure, RM99 billion for development expenditure including RM2 billion in contingency savings.
OSTB : This is more than the RM332 billion presented last October 2022. It is RM56 billion more. Where is the money coming from? Obviously more debt.
Budget 2023 allocations revised upwards to RM386.14 billion from RM272.3 billion in October 2022 (Bukan RM332b kah? Ok so its RM114 Billion more than the previous Budget that was presented).
Allocation of RM388.1 billion with RM289.1 billion for operating expenditure and RM99 billion for development expenditure (OSTB : RM386.14 billion??)
The national debt will reach RM1.2 trillion or more than 60 per cent of GDP for 2023
OSTB : Folks bear this in mind. The National Debt is now RM1.2 Trillion. The other day Rafizi said RM1.6 Trillion. This number keeps changing.
The government expects revenue collection in 2023 to amount to RM291.5 billion compared to RM294.4 billion last year.
OSTB : So revenue is dropping but the Budget allocation has increased. More borrowing.
The government projects that economic growth will be around 4.5 per cent
The inflation rate this year is expected to be the same as in 2022, at 3.3 per cent
OSTB : The 3.3% inflation rate is a non-starter. No housewife is going to believe this low number.
The government is determined to achieve a sustainable level of fiscal deficit in the medium term with a target of 3.2 per cent to GDP by 2025
The government takes a progressive approach in the context of targeted subsidies or taxation structures
Electricity tariffs have been maintained for all domestic consumers and SMEs
OSTB : Just stop talking about this ‘tariffs maintained’ nonsense. If you can lower tariffs then say so. If you cannot lower tariffs nothing has changed. The higher tariffs for MV and HV users are sending prices up again.
ASB dividend distribution that is more to the people in need
OSTB : If you lower dividends for high value ASB investors they will withdraw their money and put it elsewhere. The private unit trust companies will benefit. ASB will lose depositors.
The government proposes to introduce a luxury goods tax starting this year
OSTB : No need lah. You already have SST. This will be chaotic.
The government is proposing to impose an excise duty on liquid or gel products containing nicotine that are used for electronic cigarettes and vaping
The government to study introducing Capital Gains Tax for the disposal of unlisted shares by companies from 2024
OSTB : This will create more opportunities for corruption and smuggling of cigarettes. Which will lead to more corruption.
The New Industrial Master Plan 2030 will be announced in the third quarter of 2023 to outline the direction of industrial development focused on high-quality activities and the recruitment of local talent
OSTB : Waste of time.
The government prepares RM50 million to build new, upgrade 3,000 stalls and kiosks as facilities for small hawkers to do business in focal locations
MSME tax rate on taxable income for the first 150,000 reduced from 17 per cent to 15 per cent
OSTB : Tax cuts are good. It will help SMEs survive better.
The government continues to provide various loan and financing facilities for the benefit of MSME entrepreneurs with a total value of up to RM40 billion
OSTB : This is good. Do it fairly (racially), quickly and efficiently.
Extending tax incentives to manufacturing companies that move operations to Malaysia and a 15 percent tax rate to the C-Suite until 2024
OSTB : This is good.
Starting in 2024, shariah savings assets will be fully segregated to provide competitive returns to 1.25 million members who have shariah accounts.
About RM10 bilion loan fund readied by BNM for SMEs
SJPP prepared to guarantee RM20 bilion SME loans
OSTB : This is also good.
Government to prepare RM50 million matching grants to encourage automation in the farming sector through the use of robotics and artificial intelligence
RM80 million provided to improve the sustainability of the palm oil industry and counter the Anti-Palm Oil Campaign
RM100 million provided under the Digitisation Grant Scheme for SMEs and small vendors
OSTB : Jaga ketirisan.
The government will strengthen the role of the Digital Economic Centre (PEDi) to help small traders with ICT and e-Commerce knowledge
The cumulative investment value of Government Linked Companies is estimated to reach RM50 billion this year
OSTB : This is a waste of taxpayers money. Shut down the GLCs.
RM1 billion financing available under BNM to help MSMEs automate business processes, digitise operations
OSTB : Jaga ketirisan
GLC including Khazanah dan EPF can invest in innovative and high-growth local start-up companies to a value up to RM1.5 billion
OSTB : Jaga ketirisan
Stamp duty waiver for houses worth RM500,000 and below and 75 per cent stamp duty waiver for houses worth over RM500,000 up to RM1 million – Bernama
OSTB : This is good. It will spur transactions in the housing market.
Budget 2023 – Part 3
1. Bankrupts with debts of less than RM50,000 who fulfil certain requirements will be released from bankruptcy on March 1. This is expected to benefit 130,000 people.
2. The government will amend the Insolvency Act 1967 to release bankrupts automatically.
OSTB : This is a good start.
3. Bank Negara will allow consumers to freeze their accounts should they detect any suspicious activities.
OSTB :This could be a crooked move by Bank Negara. This should not absolve both Bank Negara and the banks from their own responsibility of detecting and stopping any suspicious activities in any domestic bank account – even before the account holders themselves detected any suspicious activities. (Or worse, they were NOT able to detect it).
Bank Negara and the banks should not use this as an excuse to wash their hands of their responsibility. Bank Negara has still not explained what action they are going to take over that obviously criminal negligence (if not outright crime) of not stopping all that money laundering activity involving 1MDB – when the huge funds flows were clearly detected by Bank Negara?
4. RM10 million to support the National Scam Response Centre.
OSTB : More importantly what punitive action will be taken AFTER a scam is discovered? Scams have been dicovered before without any punitive action being taken. In Singapore there are hardly any scams. If there are there is punitive action to protect the public from scammers. What punitive action do we have here to protect the public from scammers? Please state clearly.
5. A special task force to reform government agencies, known as STAR, will be set up. It will be led by the chief secretary to the government.
OSTB : After the Chief Secretary has completed his Kos Sara Hidup report?
6. Malaysian Road Records Information System (Marris) allocations increased to RM5.2 billion.
OSTB : Excuse me? RM5.2 billion for keeping records of motor vehicle registrations?? This is 1/3 of the RM15 billion government revenue from excise duties and import duties. Why so much money for the JPJ? Sounds like a scam.
7. RM50 million to install lampposts in accident-prone areas.
8. Government will use district engineers to speed up the repairing of federal roads.
9. RM2.7 billion to repair and upgrade federal roads.
OSTB : A good idea to use district engineers. But please jaga ketirisan.
10. RM1.2 billion to repair 400 dilapidated clinics and 380 dilapidated schools.
11. The government plans to table amendments to the Whistleblowers Act to better protect whistleblowers.
OSTB : Good. Amend the Whistleblowers Act quickly. In its present form it makes fools of the people.
12. The government plans to table the Government Procurement Act.
13. Government procurement must be transparent. RM22 billion worth of contracts linked to flood mitigation projects and the Jana Wibawa project were awarded via direct negotiation.
OSTB : I will believe this when I see it.
14. Private sector to establish a “Madani wakaf” involving assets worth more than RM1 billion.
15. The government will increase the availability of Islamic financing.
16. The government will also support the plans for the private sector to develop a port in Pulau Carey.
OSTB : Also known as the FOURTH port in Port Klang. Do you really need this port in Pulau Carey? Talk is the West Port, North Port and even the bulk terminal will be “logistically” linked to this new port. Meaning the overall control of port activities will be “structured” through this FOURTH PORT. Meaning the other ports must pay money to this new port. This is what I heard. Betul kah? Creating yet another monopoly?
17. The government will support the development of the Sanglang port in Perlis.
18. Putrajaya to expand Subang and Penang airports to attract investments. This is more economical than the proposed construction of a RM7 billion airport in Kulim, says the prime minister.
OSTB : Good idea. It is high time we built a world class international airport in Penang – like the KLIA. If there is business to justify it then also expand Subang Airport again.
19. The Tun Razak Exchange will become the country’s international financial hub.
OSTB : What a stupid idea. You become an international financial hub by providing an ecosystem to nurture financial professionals – thousands of CEOs of merchant banks, investment banks, professional project financiers, thousands of world class loan syndicators, armies of bond traders, bond specialists and armies of Forex dealers. You have to liberalise the banking and financial sector. One bangunan Tun Razak Exchange will not become an international financial hub. What a stupid idea.
20. Bank Pembangunan Malaysia Berhad to provide RM6 billion in strategic funding to encourage automation.
21. Tax incentives for aerospace industry will be extended to Dec 31, 2025.
22. Tax incentives for manufacturers to move operations to Malaysia will be extended to 2024.
OSTB : A good idea. Dont know about Bank Pembangunan though.
23. The government will introduce a New Industry Master Plan 2030. This will include the restructuring of investment incentives.
OSTB : Wasting time.
24. The government will give incentives to local councils that make it easier for businesses to be set up.
OSTB : I have a much better and much cheaper and far more effective solution – allow businesses to self-register online. No need to meet the local councils. They are all corrupted. Use an ‘online self-regulated compliance’ method. This means the applicants are responsible for providing all the required information truthfully. This means the local councils will accept all the information submitted by an applicant online and register the business, issue licenses immediately. Then the local council can physically check the compliance within say 12 months after registration. Fire or take disciplinary action against heads of local councils who cannot expedite the registration of new businesses.
25. Government proposes extending the Green Investment Tax Allowance (GITA) and Green Income Tax Exemption (GITE) incentives until Dec 31, 2025.
26. Bank Negara to provide RM2 billion in loans to support green technology startups and help SMEs embrace low-carbon practices.
OSTB : Wasting money.
27. RM50 million to increase the number of wildlife rangers to 1,500 people.
28. RM38 million allocated to protect endangered wildlife including tigers and elephants.
29. The government will increase allocations given to states to preserve forests from RM70 million a year to RM150 million a year.
OSTB :This is a joke. The jungle is full of cartels.
30. RM50 million for the armed forces, fire and rescue department, and Rela to prepare for natural disasters.
31. RM150 million for Nadma to prepare for natural disasters.
32. Six flood mitigation projects will be re-tendered.
33. Anwar gave the example of flood mitigation projects. He said the government could have saved RM2 billion for the projects awarded by the previous government.
34. High impact projects must be awarded via tenders to ensure the government enjoys the best value and savings.
OSTB : Yawn.
35. Bank Negara to provide nearly RM10 billion in loans for SMEs.
OSTB : Do it quickly.
36. Government to waive driving test fees for taxi, bus, e-hailing and B2 motorcycle licenses.
OSTB : Will this solve corruption at the JPJs?
37. Syarikat Jaminan Pembiayaan Perniagaan will provide RM20 billion in loans to SMEs in high value sectors.
38. RM1.7 billion in loan facilities under Bank Negara, BSN and TEKUN.
39. Government agencies to provide RM40 billion in loan facilities for MSMEs.
OSTB : Do it quickly and efficiently.
40. RM176 million to upgrade business premises and facilities under Mara, DBKL, PUNB and UDA.
41. RM50 million to build and upgrade 3,000 stalls and kiosks nationwide
42. Income tax for micro SMEs reduced from 17% to 15% for the first RM150,000.
43. The government will incentivise self declaration for income tax arrears beginning June 1.
44. Half of revenue from excise duties collected under the Generational Endgame (GEG) law will be channelled to the health ministry.
OSTB :To pay that monopoly pharmaceutical supplier? Banyak cantik.
45. Putrajaya to introduce excise duties on vape and e-cigarette liquids containing nicotine.
OSTB : Cigarette smuggling will increase.
46. The government will study the possibility of introducing a capital gains tax from 2024.
OSTB : A very bad idea.
47. The government will introduce wealth tax. Luxury watches and goods will be taxed.
OSTB : Another bad idea.
48. The government will maintain electricity subsidies for all domestic users and SMEs.
OSTB : An empty statement.
49. Lower income Amanah Saham Bumiputera (ASB) contributors will be given more dividends.
OSTB : There will be a huge outflow of money from ASB. Dont say I did not warn you.
50. The government will table a Fiscal Responsibility Act in Parliament this year to ensure better management of the economy in the future.
51. Government aims to reduce fiscal deficit to 5% this year, compared to 5.6% in 2022.
52. Government aims to collect RM291.5 billion in revenue, a decrease compared to RM294.4 billion in 2022.
Budget 2023 – Part 4. The Budget Is Quite OK.
First of all this Budget clearly shows the really coalition nature of the government. Quite obviously there are inputs from almost all the main partners in the coalition government. You can even discern the better suggestions from the less good ideas in this Budget and you can link it to which coalition partner was behind them.
Although the coalition government claims a 2/3 majority (which has not been tested, that voice vote was not even recorded in the Hansard) their 148 seats in Parliament are fragmented. DAP with 40 seats is calling more of the shots.
The word “Madani” has been added just as a consolation to the Madani man. There is nothing too Madani about the Budget. I actually see more of the DAP’s 40 Parliamentary seat “thumbprint” in the Budget.
Obviously the Madani man does not have as much say – which is all the better because he aint too good with the economy, finance or even with numbers.
For example (I double checked) that last Budget presented by Zafrul in October 2022 was for RM332 Billion. Not RM272 Billion. Here is a snapshot of Zafrul’s Budget:
That RM272 Billion that was mentioned was Zafrul’s figure for “Operating Expenditure” only. Here it is:
Maybe too many big numbers have got the Madani boys confused.
Other than that not so good idea about that port on Carey Island (Anthony Loke DAP?) I believe the DAP (Nga Kor Ming) have contributed some excellent ideas on local government and business registration. The business community will be relieved.
Overall the Budget is not too painful and neither is to too silly. It is business friendly. As I said, you can see the DAP’s thumbprint on the Budget. The business of Malaysia is business. So what is good for business is good for you and me.
Lets wait for Monday and see how the Kuala Lumpur Stock Exchange will react. I think the Bursa will react positively to the Budget.
From this chart ABOVE (from the MoF) 55.1% of the Budget is funded by Income Taxes (38.5%), Direct Taxes and Indirect Taxes. That is about RM205 Billion (out of the total RM372 Billion).
Folks, especially the Civil Service, please keep this figure in mind for the rest of this year.
THE TAX COLLECTION IN 2023 WILL BE ABOUT RM205 BILLION. THIS IS THE GOOSE THAT LAYS THE GOLDEN EGGS. 205 BILLION GOLDEN EGGS.
And how will that RM373 Billion be spent? Look at that second chart above (WHERE IT GOES). 32.2% goes to Civil Servants emoluments, pensions plus subsidies and social assistance (grand totalling 43.5%).That is RM162 billion. This amount is bigger than Income Tax collection which is about RM143 Billion only. This means even Income Taxes collected by government is not enough to pay Civil Servants salaries and pensions.
The government will have to borrow about RM100 Billion to pay for Budget 2023.
So let us be thankful to that goose that lays the golden eggs.
May I kindly request all the Civil Servants to do your best to make sure that goose can lay more golden eggs? Especially the Civil Servants at the State levels (pihak berkuasa tempatan).
Please expedite the approvals for business licenses, please expedite development project approvals, please expedite building plan approvals, please expedite transfer of land titles especially lease-hold lands, approvals of strata titles etc. Just speed everything up.
This way the goose will be able to lay more golden eggs and then the government can pay the Civil Servants even more salaries, pensions and cash payments.
Its an ok Budget. Now lets get back to work quickly. There is much to do.
-http://syedsoutsidethebox.blogspot.com/
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