This article was first published in The Star on 26 September 2022. Read the full article here.
ALL eyes will be focused on the tabling of Budget 2023 as the nation awaits in anticipation.
The government will be rolling out its curated measures to reinforce recovery post pandemic, as well as enablers that will bolster Malaysia from the effects of geopolitical tensions, food insecurity, global inflation and supply chain conundrums.
Also on the agenda is the government’s continued quest to spearhead the rakyat’s socio-economic well-being, environmental protection, technological advancement whilst maintaining resilient businesses.
What does it mean for the man on the street? The people are not forsaken as the government has kept its focus on avenues to enhance the distribution of subsidies through a targeted approach, specifically those in need as opposed to blanket subsidies.
Apart from subsidies on basic needs and fuel consumption, the budget could consider the reduction in personal income tax to ensure more disposable income will go into the hands of the rakyat while they brave through high inflation to meet their day-to-day obligations.
Cash assistance programmes for the Bottom 40 and Middle 40 households over the next few years will be appreciated, not forgoing additional cash bonus for eligible senior citizens aged 60 and above.
Moreover, the government has been urged to extend the Home Ownership Campaign (HOC) which ended in 2021 to support home purchases for first-time buyers.
With the raising of the wage floor as mandated by the government in conjunction with the fragility of the business environment due to the economic shocks brought on by the pandemic, Malaysia is not spared from the ongoing labour predicament besetting the rest of the world.
Employees today are also demanding for flexibility and work-life balance suited to their life requirements, emotional and physical health.
To facilitate effective employment management and talent retention, the government should encourage employers to focus on the welfare of their workforce via tax incentives.
For instance, double deductions or grants should be given for the provision of free food distribution, schedule recreational breaks or napping bays to avoid burnouts and boost productivity.
Also, the investment in digital technology that monitors employees’ mental health, provision of ergonomic tables and chairs in the office, upskilling and reskilling opportunities should also be considered.Alternatively, they could be translated into the provision of discount vouchers to employees in securing the facilities and benefits.
On the technology and environmental fronts, awareness campaigns, personal tax reliefs as well as accessible financing schemes may be explored for individuals.
They can adopt advanced technology such as the installation of solar panels in their home or purchase of electric vehicles.
Although schemes, including the Net Energy Metering that entered its sixth year have been implemented to drive the use of renewable energy in residential, commercial, and industrial premises, the quotas have not been fully taken up and will soon to end in 2023.
The scheme encourages the installations of solar panels on roof tops to generate energy before export the excess energy to the grid that offsets monthly energy bills – in short, these schemes will reduce cost.As the start-up capital expenditure may be high for the man on the street, the government is encouraged to offer subsidies, low-interest financing schemes and tax reliefs to make such asset ownership available on a mass scale.
Such schemes should also be extended beyond 2023 to advance the environmental, social and governance agenda.
This, in turn, will encourage manufacturers to research and develop infrastructure and other sources of renewable energy that support Malaysia’s green economy and accelerate our nation’s goal in generating 20% of renewable energy by 2025, while reducing the emission of greenhouse gases significantly by 2030.
Compost bins can also be made available to all households to advocate a waste-free lifestyle along with ongoing awareness campaigns that will popularise composting.
The resulting nutrient-dense fertiliser produced could spur the sale of excess fertiliser to the government in exchange for food vouchers, money or seedlings. This could help reduce food insecurity and ensure self-sufficiency in the local communities.
The lifestyle tax reliefs may be expanded to cover the purchase of robotics and smart home equipment which could elevate the standard of living, increase efficiency, productivity and assist the elderly in their daily routines.
Given the current context, the government’s focus to “strengthen recovery and facilitate reforms towards sustainable socio-economic resilience of Keluarga Malaysia,” is certainly on the right track.
It will be interesting to see how Budget 2023 will fulfill its theme, pillars and promises to the rakyat and business community.
A better question to ponder is how the government plans to support the budget allocation without increasing or introducing new taxes whilst ensuring fiscal discipline and sustainable debt levels.
Soh Lian Seng is head of tax at KPMG in Malaysia. The views expressed here are the writer’s own.