Luxury tax? 6 things from Anwar’s Budget 2023 speech that’ll affect the rakyat

Our Prime Minister, Datuk Seri Anwar Ibrahim, gave his Budget 2023 speech earlier this afternoon, and while you can watch the entire thing here, we’ve got a couple of highlights for you down below. Without wasting any time, let’s get into it.

1. New luxury tax & tax adjustment for T20/M40 folks

Pretty early on in his speech, Anwar announced that there will be a new luxury tax for certain items, like luxury fashion items and watches. On top of that, there are plans for the implementation of an excise duty for liquid and gel products that contain nicotine, much to the sorrow of vapers among CILISOS staff.

On the topic of income tax:

• M40 (yearly income between RM35K to RM100K): tax reduction by 2%
• T20 (yearly income over RM100K): tax increase between 0.5% to 2%

Income tax for SME operators will be decreased from 17% to 15% for the first RM150K earned (estimated tax savings of RM3K for every RM150K earned).

2. New cash & e-Wallet handout schemes, RM64 billion in subsidies

Depending on the number of children, families that earn less than RM2.5K per month will be eligible for a handout up to RM2.5K. Families that were eligible for Sumbangan Tunai Rahmah (STR) will receive an additional RM600 with Anwar mentioning that a total RM8 billion has been allocated for the STR initiative.

For 2 million young adults between the ages of 18 and 20, they’ll receive RM200 in their e-Wallets under the e-Tunai Belia Rahmah initiative. Anwar also announced a Bantuan Aidilfitri worth RM700 for all civil workers under grade 56, including contract workers, and RM350 for retirees. In light of rising living costs, RM64 billion has been allocated toward various subsidies.

3. Over RM4 billion allocated to fix roads around the country

RM2.7 billion will be allocated for the maintenance and upgrade of federal roads, and a further RM1.5 billion has been prepared to upgrade and to build new roads in rural areas.

Anwar has reaffirmed the government’s commitment to continue implementing the Sabah and Sarawak Pan Borneo Highway and Sarawak-Sabah Link Road spanning over 1,000 kilometres, at an estimated total cost of RM20 billion.

4. PTPTN discounts & moratorium

PTPTN borrowers with monthly salaries of RM1.8K and below will be eligible for a moratorium of 6 months for PTPTN repayments, and applications for the moratorium will be opened in March. Also, beginning in March, there will be a 20% discount for three months of PTPTN payments.

5. People in bankruptcy will be given a second chance

The government will be amending the Insolvency Act 1967 so people who are bankrupt can be released from their insolvent status as soon as possible. According to Anwar, bankruptcy cases of less than RM50K will be automatically released starting 1 March, subject to conditions.

6. Efforts to quash corruption in the government

In his speech, Anwar said that a total of RM3 billion was lost to corruption within the government in the years of 2020 and 2021. In an effort to quash said corruption, there are plans to amend and expand the Whistleblower Protection Act 2010, as well as renew the tabling of Akta Perolehan Kerajaan that was halted in 2019.

Additionally, he announced that government projects will be done under open tenders to ensure transparency and cost-effectiveness.