KUALA LUMPUR: The country's fiscal deficit level is expected to reduce to 4.3 per cent of gross domestic product (GDP) in 2024, in line with higher revenue and lower expenditure.
The fiscal deficit for 2023 is expected to remain at five per cent.
The Federal Government's revenue collection is estimated to go up to RM307.6 billion, or 15.6 per cent of gross domestic product (GDP) in 2024, driven by higher tax collection.
While total expenditure is expected to lower to RM393.8 billion, or 19.9 per cent of GDP, due to lower financial commitment with the absence of 1MDB bond redemption.
Operating expenditure is expected to make up 15.4 per cent of GDP at RM303.8 billion, while development expenditure is projected at RM90 billion or 4.5 per cent of GDP.
The government will also embark on its subsidy rationalisation programme, in which savings will be channeled to enhance the social safety net programme.
On revenue growth, tax revenue will continue to be the main contributor to the government's coffers, bringing in RM243.6 billion, or 6.4 per cent more than in 2023, with expansion of economic activities, higher company profitability and better employment conditions.
Non-tax revenue on the other hand is expected to go down to RM64 billion, with lower dividends from Petroliam Nasional Bhd (Petronas), reflecting a reduced dependency on petroleum-related revenue.
Several measures will also be implemented, which include capital gains tax for disposal of unlisted shares by companies, and implementation of e-invoicing.
As part of the government's fiscal reform agenda, it plans to table the Fiscal Responsbility Act in 2023, implement subsidy rationalisation; strengthen the taxation framework and formulate the Government Procurement Act (GPA) in 2024.
The FRA aims at enhancing governance, accountability and transparency of the government's fiscal management. It also mandates the publication of several new reports, such as the mid-year expenditure performance, tax expenditure and fiscal risk statements.
The GPA on the other hand will further enhance ood governance in public procurement towards achieving the best value for money and efficient spending.
Meanwhile, the government revenue projection for 2023 was up by 4 per cent or RM11.7 billion to RM303.2 billion or 16.4 per cent of gross domestic product (GDP) in 2023, on higher tax and non-tax revenue.
While total expenditure was also revised upwards by 2.8 per cent to RM397.1 billion, on higher operating expenditure.
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