Budgeting | Financial Planning | Personal Finance | Article
How Will Budget 2023 Affect My Finances?
by Ooi May Sim | 24 Feb 2023 | 5 mins read
On Feb 24, Prime Minister Datuk Seri Anwar Ibrahim, who is also the finance minister unveiled Budget 2023. With an allocation of RM388billion, it is largest the budget in the country’s history.
The original Budget 2023 was tabled by the previous government, led by former Prime Minister Datuk Seri Ismail Sabri Yaakob, on Oct 7 last year. However, it was not passed as Parliament was dissolved to pave way for the 15th General Election.
Budget 2023 addresses the high cost of living and looks to strengthen the people’s social safety net, and enhance the micro, small and medium enterprises ecosystems.
We break it down to what matters most: how these measures will affect our everyday expenses.
Additional tax relief
This year, the tax relief benefits for medical expenses will be increased from RM8,000 to RM10,000. It will also include expenses made for autism, down syndrome and specific learning disabilities.
The scope of the life insurance relief has been expanded to include voluntary EPF contributions. Relief in this category goes up to RM3,000.
With the high inflation we are experiencing now, there have been concerns that a Goods and Service Tax (GST), which would make essentials even more expensive, might be implemented. Thankfully, that isn’t happening as the government has vowed not to introduce this broad-based consumption tax.
Stamp duty waiver
Here’s some good news for those of you who are buying a house for the first time in 2023 –you won’t have to pay the full stamp duty. For properties worth RM500,000 or less, there will be a 100% stamp duty waiver.
For those who buy properties between RM500,000 to RM1million, they get 75% stamp duty exemption.
Continued unlimited public transport travel for just RM50
If you rely on public transport to get around, all you’ll need is RM50 for the month. The government will be extending the My50 unlimited travel pass which provides unlimited rides on all public transport services operated by Prasarana for RM50 a month. This includes the LRT, MRT, BRT, Monorail and Rapid KL bus services.
Electricity tariffs will be maintained for domestic consumers
Electricity tariffs will remain as is for all domestic consumers and SME businesses, and will not be raised.
Lower individual income tax for some, higher income tax for others
You can look forward to lower tax if your annual income falls between the RM35,000 and RM100,000 tax bracket. All those in this income bracket will enjoy a 2% reduction on income tax.
However, if you are in the RM100,000 to RM1million tax bracket, be prepared to fork out more taxes. There will be a 0.5% to 2% tax increase on your income.
Higher taxes on selected items
If you spend regularly on any of the following, be prepared to fork out more to enjoy these items:
- Luxury goods
Lovers of high-end goods such as luxury watches and fashion items will have pay more for their shopping as this new tax is set to be introduced this year. This move is part of the government’s progressive approach to broaden the tax base.
- Vape liquid
The government will propose an excise duty on vape liquids and gel products that contain nicotine, which is used in electronic cigarettes and vapes. This is to discourage vape usage nationwide.
Education loan discount
National Higher Education Fund Corporation (PTPTN) borrowers will receive discounts of up to 20% starting from March 1.
Also, borrowers who earn a monthly income of RM1,800 and below can receive a deferral for six months. Applications for postponement can be made from March 1.
Support for gig workers
If you’re part of the gig economy in Malaysia and have been looking to pick up new skills, Sosco will provide an allowance of RM300 for three months to undergo training programmes.
Also, as a self-employed individual, you will have to contribute to the Self-Employment Social Security Scheme (SKSPS) from 2023. The good news is that the government will bear 80% of your Socso contribution this year.
Minimise traffic congestion
For those who are looking at taking their motorcycle licences, the government will bear the cost of your riding test for the B2 motorcycle category (below 250cc).
Support for civil servants
This Hari Raya, government servants that are from Grade 56 and below will get a Hari Raya Aidilfitri special aid of RM700, while those who are on contract, and government pensioners will get RM350.
For government servants with young children and with a household income of RM7,000 or less, they’ll enjoy RM180 subsidy on childcare fees every month. This used to only be applicable for those with a household income of RM5,000 or less.
Payouts for 18- to 20-year-olds
Under the Belia Rahmah e-Tunai initiative, RM200 to RM400 will be given to youths aged 18 to 20 through ewallet credits.
Cash and food aid for B40 group
If your monthly household income is less than RM2,500, you are eligible to receive up to RM2,500 depending on the number of children in your household, under the Rahmah cash aid.
Additionally, the government will also allocate food baskets and vouchers for staple food items worth RM600 for recipients who are registered with the Women, Family and Community Development Ministry’s e-Kasih system.
Increase limit for ASB
The account limits for Amanah Saham Bumiputera (ASB) and Amanah Saham Bumiputera 2 (ASB2) will be raised from RM200,000 to RM300,000.