As most of you know, tomorrow is a monumental day for all Malaysians, as Budget 2024 will be tabled in a parliamentary session tomorrow.
But have you ever wondered where the government gets the money for the multi-billion ringgit expenditure tabled in every government budget?
Let’s shed some light on this.
Tax makes up a big chunk
Perhaps unsurprisingly for anyone familiar with the Malaysian economy, a huge chunk of the money for the government comes from taxation.
This can be seen from the Updates on Economic And Fiscal Outlook And Revenue Estimates 2023 document published by the government earlier this year.
In this document, it is listed that income tax makes up a majority of the revenue for the government, with 39.9% contribution.
Other forms of tax are also a big contributor to Malaysia’s revenue, with indirect taxes contributing towards 14% of last years’ budget, and other direct taxes contributing 2.6%.
Which means that taxes make up more than half of Malaysia’s budget, at 56.5%.
Other sources of revenue
Other sources are also a big contributor towards the money used for the national budget, with 43.5% of the money used for last year’s budget coming from other sources.
From this 43.5%, 19% came from non-tax revenue. As the name says, non-tax revenues are revenues collected from other sources that don’t involve taxation.
For example, in last year’s budget, the non-tax revenue was recorded as RM85.6 billion, which included Petronas’ dividend payment amounting to RM50 billion. Bank Negara was also a major contributor towards the non-tax revenue, with them paying RM5 billion in dividends to the government.
Source: MoF
The other 23.5% comes from usage of government assets and borrowings. Receipts from licences and permits contributed RM15.6 billion.
This is an increase of 47.7% mainly contributed by higher receipts from petroleum royalty, motor vehicle licences and levy on foreign workers.
What do you want to see from Budget 2024?
And there you have it, that’s where the government gets their money for Budget 2023. For Budget 2024, it remains to be seen just how much will be allocated, but we will find out tomorrow.
