KUALA LUMPUR: The government has revised upward its revenue in 2024 by 2.3 per cent to RM322.1 billion compared to 2023, according to the Economic Outlook 2025.
Tax revenue will continue to be the major contributor to overall revenue collection at RM241 billion, constituting 74.8 per cent of total revenue, the report said.
Tax revenue remains stable at 12.4 per cent of gross domestic product, reflecting the continued efforts by the government to broaden its tax base.
Meanwhile, non-tax revenue is estimated to decline by 5.5 per cent to RM81 billion, with a lower share of 25.2 per cent to overall revenue.
Direct tax is projected to grow by 3.3 per cent to RM177.1 billion, mainly contributed by individual and companies income tax collection of RM139.3 billion.
Individual income tax is estimated to grow by 8.0 per cent to RM40.8 billion, on account of stable wage growth, coupled with higher number of individual taxpayers.
Likewise, revenue from companies income tax is projected to increase by 7.4 per cent to RM98.5 billion due to better corporate earnings mainly from services and manufacturing sectors.
In addition, the implementation of e-Invoice which has been enforced in stages beginning August 2024 is expected to further enhance efficiency and contribute to better collection.
Nevertheless, petroleum income tax is estimated to be lower at RM21.8 billion due to reduction in crude oil production.
Meanwhile, other collections from direct taxes, mainly stamp duties and real property gains tax, are estimated to increase to RM10.9 billion, attributed to higher property market transactions.
The collection from indirect tax is anticipated to increase by 10.6 per cent to RM64 billion, driven by higher collection from sales tax and service tax as well as excise duties.
Service tax is projected to surge by 25.8 per cent to RM21.5 billion, in tandem with the increase of the tax rate from 6.0 per cent to 8.0 per cent, coupled with the widening of the scope of services, among others, including logistics, brokerage, and underwriting services effective March 1 2024.
Similarly, sales tax is estimated to grow by 5.7 per cent to RM19.4 billion in anticipation of higher passenger vehicles sales and the implementation of low value goods tax beginning Jan 1 2024.
According to the Malaysia Automotive Association report, passenger vehicles sale during the first eight months of 2024 increased by 8.0 per cent compared to the corresponding period in 2023.
Similarly, excise duties are forecast to increase by 4.1 per cent to RM13.7 billion in line with increased motor vehicle production, following the surge in demand for new vehicles.
Non-tax revenue is estimated to decline to RM81 billion in 2024, mainly due to lower investment income, particularly dividends from Petronas amounting to RM32 billion, reflecting lower reliance on petroleum-related revenue.
Receipts from licences and permits are expected to decline slightly to RM16.5 billion, mainly due to lower proceeds from petroleum royalty.