Economic Outlook 2020: Highlights of Federal Govt revenue

Sales and Service Tax revenue to increase by 5.6% to RM28.30bil

Federal Govt Budget RM297.02bil

* Largest chunk or 45.1% will come from income tax; non-tax revenue 18.4%, borrowings 17.7%, indirect tax 15.9% and other direct tax 2.9%.

* Operating and development expenditure:

* Emoluments will account for 27.8%, debt service charges 11.8%; supplies and services 13%; retirement charges 9.1%; grants and transfers to state governments 2.6%; subsidies and social assistance 8.2%; others 8.7%; economic 10.4%; social 5.1% and security 2.2%.

Federal Govt financial position: (2019 figures in parenthesis)

* 2020 revenue at RM244.53bil, down 13.1% (RM263.30bil).

* Operating expenditure at RM241.02bil, down 13.6% (RM262.26bil).

* Of Federal Government revenue of RM244.53bil, tax revenue will account for RM189.95bil (up 5.5% from RM180.01bil) and non-tax revenue RM54.58bil (down 34.5% from RM83.29bil).

Tax revenue, direct tax

* Of the tax revenue, direct tax estimated at RM142.67bil, up 5.2% (RM135.64bil).

* Individual tax collection to increase by 6.1% to RM37.36bil (RM35.22bil). Companies income tax higher by 6.7% at RM75.51bil (RM70.76bil).

* Petroleum income tax to decline by 2.4% to RM17.45bil (RM17.88bil).

* Brent oil price assumption: US$63 in 2019 and US$62 in 2020.

Indirect tax

* Indirect tax to increase by 6.5% to RM47.3bil, mainly from Sales and Services Tax (SST)

* SST to increase by 5.6% to RM28.30bil (RM26.80bil, which also included the GST). SST to account for 1.8% of GDP in line with higher consumption, Visit Malaysia Year 2020 and various international events.

* Govt targets 30 million tourists and RM100bil in tourist receipts in 2020.

* Sales tax collection expected to increase by 5.4% to RM16.30bil, mainly from sale of machines, spare parts and sale of vehicles.

* Service tax estimated at RM1.2bil, mainly due to demand for food and beverages, telecommunications and insurance.

* Excise duties to increase by 4.9% to RM11bil (RM10.48bil) due to higher demand for vehicles.

* Import duty is expected to increase by 4.9% to RM2.80bil (RM2.67bil) and export duty to increase by 1.6% to RM1.30bil (RM1.28bil).

* Non-tax revenue expected to fall by 34.5% to RM54.58bil (RM83.29bil). Licences and permits to account for RM15.17bil (down 0.2% from RM15.20bil) due to lower proceeds from petroleum levy.

* Investment income is expected to decline by 52% to RM28.58bil (RM59.50bil when there was a Petronas special dividend of RM30bil).

Petroleum-related revenue

* Revenue to be RM50.50bil in line with average world crude price oil at US$62 per barrel.

* Non-petroleum revenue to increase by 6.6% to RM194.10bil and account for 12.1% of GDP.