Malaysia plans record budget to support economic recovery
KUALA LUMPUR, Malaysia (AP) – The Malaysian government on Friday proposed a record budget for 2022 to support an economic recovery from the coronavirus pandemic, with various industrial incentives and cash donations for the poor and a single tax for businesses high income.
Finance Minister Zafrul Aziz presented to Parliament the proposed budget of 332.1 billion ringgit ($ 80.2 billion), compared to 320.6 billion ringgit ($ 77.4 billion) for the year in Classes.
He said a lockdown of the virus in the third quarter had delayed the economic recovery. With 95% of adults and over 60% of adolescents fully immunized, he said the budget is designed to “strengthen economic recovery, build resilience and drive reforms.”
The budget is the first under the administration of Prime Minister Ismail Sabri Yaakob, who took office in August after two changes of government since the 2018 elections.
Ismail was the deputy prime minister of Muhyiddin Yassin, who resigned after less than 18 months in power following internal feuds within his coalition. Ismail’s appointment brought Muhyiddin’s alliance back to power.
He also returned the post of prime minister to the United Malaysian National Organization from Ismail, which had ruled Malaysia since gaining independence from Britain in 1957 but was ousted in the 2018 election amid a multibillion dollar financial scandal.
Zafrul said the Malaysian economy is expected to grow 5.5% to 6.5% in 2022, compared to 3% to 4% expected this year after contracting 5.6% last year. Despite the increase in spending, he said the government’s budget deficit is expected to narrow to 6% from 6.5% this year.
With many livelihoods affected by the pandemic, he said the government will distribute 8.2 billion ringgits ($ 2 billion) in cash that will benefit 9.6 million poor households and individuals. Almost 5 billion ringgit has also been allocated to create 600,000 new jobs, he said. The budget also includes around 31 billion ringgit ($ 7.5 billion) for grants, assistance and other incentives to ease the burden on the public, he said.
To increase state coffers, Zafrul said the government would impose a one-time special tax on high-income businesses generating more than 100 million ringgit ($ 24.1 million) in profits. The first 100 million ringgit of taxable income will be taxed at 24% while the rest will be taxed at 33%, he said.
Opposition lawmakers questioned how the government would raise enough money for the expanded budget and said it was not focusing enough on helping businesses get out of the crisis.
“They will borrow, borrow and borrow. With this budget, the national debt will exceed 1 trillion ringgit ($ 241.4 billion) in 2022. The debt service costs for these debts will be 43 billion ringgit ($ 10.4 billion) in 2022. ”, Which is more than the 32 billion ringgit ($ 7.7 billion) allocated. for health, tweeted opposition MP Wong Chen.
The budget is seen in part as an effort by Ismail and his UMNO party to regain public support, especially among rural Malaysians, and show that he can once again run the country. The general election is not scheduled until 2023, but many expect an election to be called next year.
This story corrects the name of the Minister of Finance.
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