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Anwar tightens spending, taxes the rich
Three months into the job, Anwar is having to balance fiscal prudence with demands to address higher costs of living and a slowdown in Malaysia's export-driven economy.
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Taking lead: Malaysia’s Prime Minister Anwar Ibrahim (second right) speaks during a press conference to announce new cabinet members at the Prime Minister’s office in Putrajaya, Malaysia, on Dec. 2, 2022. (AFP)
M
alaysia on Friday unveiled a scaled-back spending plan for the year and plans to tax the wealthy as Prime Minister Anwar Ibrahim focuses on narrowing the budget deficit.
Three months into the job, Anwar is having to balance fiscal prudence with demands to address higher costs of living and a slowdown in Malaysia's export-driven economy.
But Anwar, who is also finance minister, vowed to maintain subsidies and other government support for lower-income groups, and broaden the revenue base through taxes targeting luxury goods and capital gains.
The fiscal deficit is expected to narrow to 5 percent of gross domestic product (GDP) this year from 5.6 percent last year, his government said in a report released alongside the budget presentation in parliament on Friday. The forecast is more ambitious than his predecessor's earlier target of 5.5 percent.
Anwar's government is tabling its first budget since being elected to power in November. His predecessor had presented a budget plan for 2023 in October, but it was not passed in parliament due to the election.
In a speech in parliament, Anwar said Malaysia will introduce a luxury goods tax this year and consider implementing a capital gains tax.
He ruled out a goods and services tax, saying it was not the right time.
