In the Fiscal Outlook 2022, it says the higher revenue will be driven by the anticipated increase in tax revenue collection to RM171.4bil and non-tax revenue to RM62.6bil.Similarly, total expenditure is budgeted to be slightly higher at RM332.1bil or 20.3% to GDP, attributed to higher operating expenditure (OE) at RM233.5bil and development expenditure (DE) at RM75.6bil.
The remaining RM23bil is for disbursements under the Covid-19 fund.
The increase in OE is mainly due to supplies and services, debt service charges as well as emoluments.
The Government says the allocation will support programmes and projects such as wage subsidy and cash assistance programmes as well as small- scale projects.
As stipulated under the Temporary Measures for Government Financing (Coronavirus Disease 2019 (Covid-19)) Act 2020 [Act 830], the fund will continue to remain in operation until end-2022.
After considering revenue growth and expenditure requirements, the fiscal deficit is expected to moderate to 6% to GDP.
Similarly, excluding the debt service charges, the primary deficit is estimated at 3.3% to GDP.
The government is committed to providing adequate fiscal support to revitalise the domestic economy back to its growth potential.
Hence, the resumption of fiscal consolidation will be on a more gradual trajectory, guided by the medium-term fiscal framework.
Meanwhile, the 2022 to 2024 Medium-Term Fiscal Framework has been revised with a more gradual fiscal consolidation on the assumption of nominal GDP growth averaging 7.7%, average crude oil prices at US$67 per barrel as well as average crude oil production of 580,000 barrels per day.
Total revenue in the medium term is projected at RM736bil or 13.9% to GDP, contributed mainly from non-petroleum revenue estimated at RM600.7bil or 11.3% to GDP. Petroleum related revenue is forecast at RM135.3bil or 2.6% to GDP.
The total indicative expenditure ceiling for the 2022 to 2024 period, including the Covid-19 Fund, is estimated at RM999.9bil or 18.9% to GDP.
The OE allocation is projected at RM726.9bil or 13.7% to GDP, while DE at RM250bil or 4.7% to GDP.