BY UMSU PRESS
The whole country has been engaged in heated discussions recently over the annual Malaysia Budget 2022 that has been presented in the parliament by the finance minister, Tengku Zafrul Abdul Aziz on the 29th of October 2021.
When the Pre-Budget 2022 statement was proposed, the finance ministry discussed strategies to increase the tax revenues by implementing a Special Voluntary Disclosure Program (SVDP) for indirect taxes (RMCD) by the Royal Customs Department. They also proposed strategies to strengthen the system to provide an incentive framework that is responsible for changes in the business environment and economic landscape. The following frameworks are:
Another reason for this strategy is to ensure that revenue from tax collection is constantly controlled and expanded sustainably in line with GDP growth by the Medium-Term Revenue Strategy (MTRS). Taxation in MTRS consists of three major components: Tax Policy, Tax Administration, and Tax Legal Framework.
On the 29th of October 2021, the finance minister, Tengku Zafrul Abdul Aziz presented Budget 2022, which he described as the country’s largest ever. Some key figures of interest that need to be focused on are the expenditure increase, total revenue, operation expenditure (OPEX), development expenses and the fiscal deficit.
Malaysia’s Budget 2022 expenditure has been expected to increase to RM332.1 billion, which is about $80.07 billion from RM320.6 billion in 2021. The total revenue is expected to reach RM234 billion in 2021, up from RM221 billion in 2021. Tengku Zafrul Abdul Aziz has also added that the operating expenses are expected to be RM233.5 billion, which is an increase of 6.3% compared to the year 2021 while the development spending is expected to reach RM75.6 billion compared to RM69 billion in the year 2021. The fiscal deficit is expected to be 6% in 2022 which has been reduced from 6.5% in 2021. The economy for the year 2022 is seen to increase 5.5% – 6.5% percent in 2022, up from 3% – 4% in 2021. Meanwhile, the Covid-19 funds allocated for the year 2022 is RM23 billion. Tengku Zafrul Abdul Aziz has also stated that Covid-19 funds will come to an end in 2023.
A lot of opinions and statements have been thrown about Budget 2022. Anwar Ibrahim debated on how unrealistic the Gross Domestic Product (GDP) growth is. He also projected that developing countries' growth worldwide is 4.9% and developed countries are just 5.1%, which is lower than Malaysia’s expected projections. Member of Parliament (MP) Subang, Wong Chen also said, “This is not logical and as such these revenue numbers are flawed, yet again” as the projected 2022 revenues were higher than the net revenues of 2019, before the Covid-19 pandemic, after deducting a tax amnesty gain and an extraordinary Petronas dividend of RM30 billion.
Apart from this, the allocation based on race that is still being practised have drawn criticisms from netizens . The allocation for Bumiputeras has been increased to RM11.4 billion from RM11.1 billion in 2021. The allocation for the Chinese is RM200 million, for Indians it is RM145 million, an increase from the RM120 million allocated in 2021. The Orang Asli will receive RM274 million as per Budget 2022 statements.
In terms of percentage, the allocation for Bumiputeras are 94.85%, Chinese are1.66%, Indians with1.22% and the Orang Asli with only 2.27%. A Facebook post by one of the netizens has pointed out that this is extremely disproportionate to the population of Malaysia where the Bumiputeras make up almost 69% of the population, Chinese 23% and Indians with 7%, with a disclaimer that these are government estimations and reality may vary. However, as per these statistics, the Chinese should at least receive RM1.2 billion.
The raise in allocation for the Orang Asli was a good thing but they are lacking in many ways too. The budget per person stated in the post are as follows:
Even for Budget 2021, it has extremely wide Bumiputera and non-Bumiputera disparities. According to the budget speeches, which are not exhaustive but highlight the government's main objectives for each group, planned Bumiputera allocations for 2021 account for 95.5 percent of all ethnic-targeted programmes. The Bumiputera share in the Pakatan Harapan budgets for 2019 and 2020 was only slightly lower, at 95.1 percent and 93.3 percent, respectively.
However, there are some netizens who expressed their thoughts and said that instead of arguing about who gets the bigger allocation, we should focus on working together to ensure that the economy recovers so that we can produce growth and expand the economic pie for the benefit of the many. The caveat to all of this is that the government must be aware that poverty exists in all communities, regardless of colour or creed, and that people in need should receive the aid they deserve from their government.
Hopefully, for the next Malaysia Budget, which is Budget 2023, the government will be able to overcome the inequalities in certain aspects and also come up with better budget planning and to also keep up the plans to recover the Malaysian economy.
Written by Secretariat of Current Affairs 2021
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