Malaysia Budget 2017

The 2017 financial budget has been hailed by many industry experts as a well guided and forward looking plan. Announced by Malaysian Prime Minister Najib Razak on 21st October, this budget aims to target the budget deficit and put a stop to the rapidly increasing cost of living in Malaysia. Also on the agenda is the government’s aim to speed up economic growth, which had plateaued compared to other Asian powerhouses such as China or India.
Highlights of the Budget
The government announced a 2017 budget of MYR 260.8 Billion or USD 62.3 Billion. Compared to the 2016 budget of MYR 252 Billion, this 2017 Malaysian budget represents an increase of 3.4 percentage points. The Malaysian government aims to increase the revenue collection, primarily through taxes to MYR 219.7 Billion or USD 52.24 Billion. Again, this stands for a 3 percentage points increase over the revenue collection for the year of 2016. The expected budget deficit for 2017 is pegged at MYR 40.3 Billion or USD 9.58 Billion, corresponding to 3 percentage points of Malaysia’s gross domestic product, abbreviated to GDP.
Changes on Taxation
Tax revenue is set to see an increase of 8.1 percentage points over the previous year, primarily thanks to increased corporate taxes. Revenue from the oil and petrochemical industry is projected to remain low. The implementation of the goods and services tax, abbreviated to GST, has also been quite a success, with the government having raised taxes to the tune of almost MYR 30 Billion or USD 7.13 Billion as of 19 October 2016. Possibly because of that, Prime Minister Razak has said that the goods and services tax will not see an increase in the 2017 budget.
Government Expense Plan
The Malaysian government under Prime Minister Najib Razak is aiming for a savings amounting to MYR 2 Billion or USD 480 Million to target the country’s budget deficit. MYR 46 Billion or nearly USD 11 Billion has been allocated for the development of the country’s infrastructure, including various public services as well as some of the government’s flagship projects.
The Malaysian government has also announced that it has allocated nearly MYR 10 Billion or USD 2.38 Billion for subsidies for the year 2017 for the benefit of the country’s poor and middle classes. Malaysia’s direct cash aid program BR1M has been allocated MYR 6.8 Billion or USD 1.62 Billion for 2017. This is expected to be very popular with the voters because the direct benefit scheme has seen a lot of positive feedback ever since it was rolled out.
Public Housing And Health Infrastructure
Prime Minister Najib Razak has said that the 2017 budget has particularly focused on the country’s employed youth and the burdens they face. To increase the affordability of homes, especially for new and first time buyers, the government plans to make more land available for sale and real estate development. PR1MA has been targeted with the goal of building more than 30,000 new homes in 2017.
The country’s healthcare infrastructure is also expected to be improved thanks to an allocation of MYR 536 Million or USD 127.45 Million for upgrading public hospitals. An additional MYR 4.5 Billion or USD 1.07 Billion has been allocated for the construction and operation of healthcare clinics in both rural and urban areas.