{"id":59164,"date":"2023-10-11T15:41:19","date_gmt":"2023-10-11T07:41:19","guid":{"rendered":"http:\/\/wordpress-my-161844363.ap-southeast-1.elb.amazonaws.com\/articles\/?p=59164"},"modified":"2023-10-11T15:41:19","modified_gmt":"2023-10-11T07:41:19","slug":"subsidy-cut-budget-2024","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/subsidy-cut-budget-2024","title":{"rendered":"Some Subsidies May Be Cut At Budget 2024"},"content":{"rendered":"

Subsidies for the financially well-off may end up getting cut at Budget 2024. The money may instead be going towards providing cash aif for the needy, prioritising support for low-income households amidst a sluggish global economy and increased fiscal strain.<\/span><\/p>\n

According to Deputy Finance Minister Datuk Seri Ahmad Maslan, Malaysia\u2019s expected growth for 2023 is expected to be <\/span>moderate at 4 percent- 5 percent<\/span><\/a>, a notable drop compared to 8.7 percent last year.<\/span><\/p>\n

<\/span>Electricity and petrol subsidy cuts<\/span><\/h2>\n

Prime Minister Anwar Ibrahim is expected to announce a smaller spending plan for 2024 when he tables Budget 2024 in parliament this Friday.<\/span><\/p>\n

As reported by Reuters, the Prime Minister is also expected to <\/span>announce some cuts<\/span><\/a> of electricity and petrol subsidies, and announce other measures to alleviate the rising cost of living.<\/span><\/p>\n

“With efforts to pull in investments, socioeconomic restructuring, and the need for fiscal resilience, we believe there is a strong likelihood the budget will focus on fiscal tightening with an emphasis on funds reprioritised to households and sectors most needy,” CGS-CIMB analysts said in a research note this month.<\/span><\/p>\n

CGS-CIMB also predicts that Malaysia’s fiscal deficit will narrow to 4.3 percent of gross domestic product (GDP) from an estimated 5 percent this year, citing subsidy cuts as the catalyst.<\/span><\/p>\n

Earlier in October, Economy Minister Rafizi Ramli had said that the government will announce in the 2024 budget a shift to targeted subsidies. This move is expected to save at least US$1 billion to US$2 billion a year. He also mentioned that cash aid could also be given out.<\/span><\/p>\n

Currently, Malaysia has a number of blanket subsidies on certain goods such as petrol, cooking oil, and rice. Since coming into power in November 2022, Anwar has vowed to move to a targeted subsidy system that mainly aids the lower-income groups.<\/span><\/p>\n

The cost of subsidies has risen in recent years due to rising commodity prices, putting a strain on the government\u2019s finances. Malaysia expects to spend 81 billion ringgit ($17.14 billion) in subsidies this year alone.<\/span><\/p>\n

<\/span>Steps to implement capital gains and luxury taxes<\/span><\/h2>\n

Economists expect A<\/span>nwar to announce steps to implement capital gains and luxury taxes first mooted in the previous budget to broaden the revenue base.<\/span><\/p>\n

There have also been talks about the potential reintroduction of the Goods & Services Tax (GST)<\/a> from late 2024 or early 2025. GST was first introduced in 2015 at a rate of 6 percent but was scrapped in favour of the sales and service tax (SST) in 2018. Currently, the sales tax sits at 5 percent to 10 percent while the service tax is 6 percent. Kenanga analysts expect the government may transition to GST at a lower rate of 4 percent.<\/span><\/p>\n

“Since the government plans to reduce subsidies for higher-income individuals first before reintroducing GST, we reckon that this transition may only happen in the second half of 2024,” Kenanga said.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Rising costs and a sluggish global economy has put a strain on Malaysia\u2019s finances.<\/p>\n","protected":false},"author":58,"featured_media":51874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1602,271,216],"tags":[1395,323,982,478],"class_list":["post-59164","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-2024","category-economy","category-news-updates","tag-budget-2024","tag-economy","tag-news","tag-subsidy"],"acf":[],"yoast_head":"\nBudget 2024 May See Certain Subsidies Cut<\/title>\n<meta name=\"description\" content=\"With Budget 2024 around the corner, we will likely be seeing some cuts to existing subsidies as a smaller spending plan is expected for the coming year.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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