KUALA LUMPUR (Oct 29): Petroleum-related revenue is forecast to fall to RM43.9 billion — or 18.8% of total revenue — in 2022, more than half of which will be in the form of Petroliam National Bhd (Petronas) dividends.
For 2021, petroleum-related revenue is estimated to amount to RM42.5 billion, or 19.2% of total revenue, according to the 2021/22 Economic Report.
The RM42.5 billion projected revenue is, however, higher than the Budget estimate of RM37.8 billion as a result of higher dividends from Petronas on the back of improving global crude oil prices.
Meanwhile, non-petroleum revenue, which makes up the remaining 81.2% of total revenue, is expected to increase by 6.5% to RM190.1 billion. This, the report said, reflects better revenue diversification on the back of a favourable economic outlook.
“The government will continue to ensure sustainable non-petroleum revenue generation to meet expenditure commitments, particularly to serve the needs of the rakyat,” it said.
The report said direct tax collection is expected to increase by 6.1% to RM127.3 billion in 2022, or 74.3% of total tax revenue, driven by better corporate earnings prospects in line with the economic recovery.
Corporate income tax, projected at RM65.5 billion in 2022, will continue to be the largest contributor to the government’s direct tax revenue.
This will be followed by individual income tax collection, which is expected to improve by 3% to RM37.5 billion, in line with expected improvements in the job market.
Meanwhile, petroleum income tax will also record a higher collection of RM12.4 billion, the report added.
The government also expects to see higher collection from other components of direct tax, such as stamp duties and real property gains tax amounting to RM6.6 billion and RM1.8 billion respectively, as it expects to see higher value and volume of transaction in the property segment.
The report said indirect tax collection is forecast to improve by 5.4% to RM44 billion in 2022, with the sales and service tax being the largest contributor at RM27.6 billion or 1.7% of gross domestic product on the back of improved consumer and business sentiment.
The government also foresees a pickup in motor vehicle production by 21% in 2022, bringing forecast excise duty collection to RM10.2 billion.
As for non-tax revenue, the report said it is estimated to increase by 5.8% to RM62.6 billion in 2022 from higher proceeds from investment income.
Petronas is expected to contribute RM25 billion, while Bank Negara Malaysia will contribute RM5 billion in dividends. The government will also be tapping into Retirement Fund (Incorporated) (KWAP) for a total of RM5 billion to partly finance retirement charges.
The country is also expected to collect RM10.9 billion from licences and permits in 2022, the report said.
