PETALING JAYA: The Federal government revenue is expected to turn around 6.1% to RM225.3 billion (2016 : -3%; RM212.4 billion) or 16.8% of GDP attributed to higher tax revenue collection of 6.4% (2016: 2.4%). This is driven mainly by better collection from companies income tax (Cita) and individual income tax.
Cita is estimated to increase 6.6% to RM67.8 billion, while individual income tax is to grow to RM30.1 billion, on steady wage growth and higher number of individual income tax files of 7.2 million. Petroleum income tax is estimated to increase 29.9% to RM10.9 billion.
Tax revenue, with a share of 80% of total revenue or 13.5% of GDP remains the largest contributor to Federal government’s revenue.
Indirect tax is estimated to increase 1.3% to RM60.5 billion mainly on account of better collection from goods and Services Tax (GST). GST alone is expected to contribute RM41.5 billion, primarily from wholesale and retail trade, repair of motor vehicles and motorcycles sector.
Non-tax revenue is projected to increase 4.8% to RM45.1 billion, accounting for 20% of total revenue primarily from investment income from Petroliam Nasional bhd (Petronas) and Bank Negara Malaysia.
Total government expenditure is expected to increase 5.4% to RM265.9 billion. Of this, a sum of RM219.9 billion is allocated for operating expenditure, while the balance of RM46 billion is for development expenditure.
