THE federal government’s revenue increased by 25.9% or RM60.61 billion to RM294.36 billion last year compared with RM233.75 billion in 2021.

According to the Auditor-General’s (AG) Report on the Financial Statements of the Federal Government 2022 released today, the final allocation for operating expenses approved was RM236.97 billion, while operating expenditures amounted to RM292.69 billion.

“Tax collection increased 20.2% to RM208.77 billion, against RM173.70 billion in 2021.

“The sharp increase (in tax collection) included petroleum income tax rising by RM11.85 billion to RM23.42 billion, corporate income tax increasing RM2.30 billion to RM82.13 billion and individual income tax expanding by RM6.74 billion to RM33.78 billion,” the report said.

The report said non-tax revenue increased 55.7% to RM79.61 billion last year compared with RM51.12 billion in 2021, due to the profit and interest earned from investments, which jumped 66.3% to RM58.22 billion.

It said the increase was due to higher dividends paid by Petroliam Nasional Bhd, amounting to RM50 billion, compared with RM25 billion in 2021, apart from an increase in petroleum royalties to RM5.98 billion.

“RM1.66 billion in excess revenue was moved into the Development Funds Group, making actual operating expenditures in 2022 at RM294.36 billion.

“Grants and fixed charges were recorded as the highest expenditure, amounting to RM170.243  billion or 57.8% of the total operating expenditure,” it said. 

The report also stated that the total development expenditures of ministries and federal departments stood at RM71.57 billion or 104.5% compared to the approved allocation, including development expenditure of RM6.068 billion imposed during the accounts payable period.

“These expenditures were at the Finance Ministry (MOF) level and involved the channelling of allocations to DanaInfra Nasional Bhd, Prasarana Malaysia Bhd and Urusharta Jamaah Sdn Bhd,” it said.

The report added that MOF recorded the highest expenditures at RM120.17 billion or 40.8% of the federal government’s 2022 operating expenditure, having increased RM47.13 billion or 64.5% compared to 2021’s RM73.05 billion.

“The MOF’s sharp increase (in expenditure) was attributed to petroleum products subsidies amounting to RM45.18 billion, an increase of RM35.16 billion or 350.8% compared with 2021’s RM10.02 billion.

“Subsidy expenditure totalled RM55.44 billion, an increase of RM42.31 billion or 322.1% compared with 2021’s RM13.13 billion,” it said.

The auditors recommended that the federal government improve operating expenditure discipline, strengthen revenue-generating efforts, and monitor loan repayment commitments.

They said these steps are vital to increase excess revenue to fund development and reduce dependency on new loans.

The auditors also recommended that the federal government funds in the Development Fund Group be used for projects under Malaysia’s Five-Year Development Plan.

“Expenditure intended to be channelled to companies for the repayment of loans must be monitored to ensure that it does not continue to rise in the future,” it added. – Bernama, October 10, 2023.