At the outset, the re-tabled Budget 2023 commits to fiscal consolidation with further reduction in budget deficit to GDP ratio to 5% this year and to 3.2% by 2025. However, we believe the government will continue to remain steadfast in addressing issues like high cost of living, better-paying jobs and adequacy of retirement savings as well as implement measures for socio-economic uplift of the poor and low-income groups, tax cut for middle-income taxpayers, empower MSMEs, promote investment, boost tourism, enhance food security, improve basic public infrastructure and essential public services.
These are balanced with redistributive and progressive tax proposals such as increases in tax rate of higher income taxpayers, luxury goods tax, capital gains tax on disposal of unlisted shares and excise duties on vape products, coupled with strengthening governance and effectiveness of public spending.
We welcome the budget initiatives that are relevant to the financial sector, including tax incentives for ACE and LEAP listings and Bankruptcy Act reform which will catalyse entrepreneurship, the renewed focus on Islamic finance and the proposed consumer credit act and monitoring authority to create a level regulatory playing field.
Equally important to note, the budget is not just about medium-term fiscal sustainability but also broader aspects of longer-term sustainability, including protecting biodiversity, preserving environment, greening the economy and addressing climate change.