Malaysia budget 2023: Anwar aims taxes at ‘rich elites’ amid cost of living crisis

The government will spend US$87 billion to help people struggling with soaring inflation, including on handouts for the poorest and income tax cuts for middle earners

The wealthy face higher taxes on luxury goods and capital gains, while e-cigarettes will also be taxed to fund health services

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A worker pushes goods at a wholesale market in Kuala Lumpur. Photo: AFP

Published: 4:00pm, 24 Feb 2023Updated: 7:03pm, 24 Feb 2023

Malaysian Prime Minister Anwar Ibrahim on Friday asked the nation’s “rich elites” to help pay for the cost-of-living crisis with taxes on share profits, luxury watches and vapes, while gifting cash to the poorest and trimming income tax for middle earners.

The country is contending with soaring inflation, driven in part by the energy price hike caused by Russia’s invasion of Ukraine which has dulled the economic rebound from the pandemic and left the poorest struggling to afford basics.

In a bold budget aiming to insulate a hard-pressed public while servicing a burgeoning national debt pile, Anwar said the government planned to spend 386.1 billion ringgit (US$87 billion) this year, partly pulled from new revenue streams.

“Considering the income and national wealth that is concentrated among the rich elites, it is only reasonable that the country’s revenue focuses on the low and middle-income groups,” said Anwar, who is also finance minister. “Everything that is luxurious should be taxed properly.”

Malaysia’s Prime Minister Anwar Ibrahim will impose a tax on luxury items such as watches. Photo: Pool/AFP

Anwar, 75, said the government would expand its tax base among higher-income earners, including a luxury goods tax on top-tier items such as premium watches and fashion.