GOVERNMENT revenue is expected to reach RM236.9 billion, or 15.1 per cent of gross domestic product (GDP), next year, according to the Economic Outlook 2021.
The higher projection is based on the expected increase in tax revenue collection to RM174.4 billion and non-tax revenue of RM62.5 billion.
"Total expenditure is estimated at RM322.5 billion or 20.5 per cent of GDP. Operating expenditure is budgeted at RM236.5 billion and development expenditure at RM69 billion, while the remaining RM17 billion is for the Covid-19 fund disbursement," said the report.
The operating expenditure is mainly for emoluments, debt service charges as well as supplies and services, while the development expenditure allocation will be mainly steered towards accelerating impactful public infrastructure projects, primarily for transport and connectivity.
Additionally, the government will provide a sizeable allocation to ensure better quality healthcare and accessibility to health services for ongoing projects, including the construction of pathology laboratories and procurement of medical equipment.
"The implementation of the programmes and projects will continue to be aligned with the nation-building agenda that is based on sustainable development.
"The government will ensure a swift implementation of the economic stimulus packages and recovery plan under the Covid-19 fund."
The report said Malaysia's 2021 fiscal deficit was expected to ease to 5.4 per cent of GDP, from about six per cent this year, with the primary deficit estimated at 2.9 per cent.
"The government is committed to gradually consolidate its deficit level in the medium-term and resume its fiscal consolidation trajectory without disrupting the momentum of economic recovery and long-term development agenda."
Government revenue this year is expected to be negatively affected by slow economic activities and lower crude oil price.
Revenue shortfall is estimated at 20 per cent from the 2020 Budget estimates.
But it will be cushioned by additional dividends and a special contribution from entities such as Petroliam Nasional Bhd, Khazanah Nasional Bhd and Retirement Fund Inc.
"Total revenue is revised lower at RM227.3 billion or 15.8 per cent of GDP compared to the budget estimates at RM244.5 billion," said the report.