Finance Minister II, Datuk Seri Amir Hamzah Azizan, revealed that 97 federal agencies recorded a significant increase in their current surplus, amounting to RM73.9 billion in 2023, up from RM55.8 billion in 2022, based on a detailed analysis of the Auditor-General’s Report.
Amir Hamzah highlighted that four major federal agencies were the primary contributors to this achievement. These included the Employees Provident Fund (EPF), which posted a surplus of RM41.3 billion, and the Retirement Fund (Incorporated) or KWAP, which recorded a surplus of RM9.6 billion.
"In addition, Bank Negara Malaysia (BNM) contributed RM7.2 billion, and the Public Sector Home Financing Board (LPPSA) added RM3.1 billion to the overall increase," Amir Hamzah explained in his ministry;s winding up speech in the Dewan Rakyat on Thursday on the Auditor-General’s Report 1/2025 regarding the Federal Government’s Financial Statements for 2023, which was officially published on Monday.
Responding to a query raised by Jimmy Puah Wee Tse (PH-Tebrau) about investment losses incurred by KWAP, the Finance Minister clarified that 15 out of KWAP’s 17 subsidiaries are special purpose vehicles (SPVs) designed for property investment both domestically and internationally.
“The establishment of these SPVs serves two key purposes: to mitigate the investment-related risks for KWAP and to optimize the returns on overseas investments, particularly through more effective capital structures from a tax perspective,” he said.
Regarding KWAP's financial performance, Amir Hamzah revealed that seven of KWAP's subsidiaries experienced a collective loss of RM80 million in 2023. This loss, according to the Minister, was attributed to three key factors: the restructuring of capital, a drop in the value of the commercial property at 100 Cheapside in the UK, and reduced occupancy rates at the Menara Capsquare building in Kuala Lumpur.
However, he reassured that KWAP’s other real estate investments performed well, with strong occupancy rates and positive net returns. "KWAP's management is continuously monitoring the performance of these subsidiaries," he added.
Turning to the issue raised by Dr. Abd Ghani Ahmad (PN-Jerlun) regarding the Internal Revenue Board's (IRB) deficit of RM735 million in 2023, Amir Hamzah explained that the shortfall was not of significant concern. Instead, it resulted from the Ministry of Finance’s decision to reduce the IRB's agency fee allocation from RM3.2 billion in 2022 to RM2.1 billion in 2023.
“The Ministry of Finance made this decision after considering IRB's cash reserves, which were sufficient to partially cover its expenses for 2023,” he elaborated. He further noted that at the beginning of 2023, IRB had an initial cash balance of RM1.12 billion, enabling it to cover the deficit through internal resources without disrupting its operations.
“The IRB still maintains a positive accumulated surplus of RM104.55 million and a net asset value of RM279.66 million as of December 31, 2023," the Finance Minister confirmed.
Stressing the Ministry of Finance's role in managing the country's cash flow, Amir Hamzah assured that the Ministry would continue to ensure that the IRB's financial needs were met, ensuring its ability to fulfill its tax collection duties for the nation.
In response to several Members of Parliament's concerns regarding the EPF, Amir Hamzah stated that the EPF had also categorized the losses suffered by its nine subsidiaries under similar criteria as KWAP: capital structure, declining property values, and lower occupancy rates.
The debate involving agencies and entities under the Ministry of Finance, as documented in the Auditor-General's Report, saw contributions from 18 Members of Parliament. – February 28, 2025
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