Selangor Journal
A view of the city skyline in Kuala Lumpur, on July 2, 2020. — Picture by REUTERS

Govt still has space to control nation’s expenditure — Economy Minister

KUALA LUMPUR, March 1 —

The government still has space to control the country’s expenditure particularly development expenditure to ensure it is more prudent and accurate according to the project plans and this will indirectly assist the government in terms of better revenue needs.

Economy Minister Rafizi Ramli said, if the government is able to manage the implementation of an approved project well and ensure it is carried out within the allocated expenditure without the increase in cost from year to year, certainly the need to spend is reduced.

“When the need (to spend) is reduced, the project proceeds smoothly and with no delays, as we are in a budget deficit position, then the need for allocation is reduced, and debt will also be lower.

“Hence, in the next 12 to 15 months, there’s no need to (introduce) new taxes, Goods and Services Tax (GST) and others. Planning project implementation better would help raise government revenue,” he said after delivering his address at the HSBC Asian Business Forum, earlier today.

Besides that, Rafizi said the government should look at GST as a better tax collection mechanism and not a mechanism for it to collect more taxes.

In other countries, when people’s income reached a level that is high, a majority of the people would pay income tax.

“Only that in terms of the process of collecting this (income) tax, it is fussier as it involves a longer process. In comparison, the approach to collect income tax is more difficult than GST as GST is collected by traders for the government, so it does not need assessment and so forth,” he said.

When the government switched from income tax to GST, the income tax rate would be reduced because the transition to GST is not to collect additional tax but because it is a better approach to collecting tax.

“We need to reach that level (better income for the people) first (before implementing GST). Hence, in a situation where the majority of the people is still not in that bracket (to pay income tax), and if we implement GST, the group with income that is not taxable will have to do so,” Rafizi further said.

Meanwhile, HSBC Malaysia said Malaysia is in a prime position to be a major beneficiary of the global economic transformation, but organisations need to continue to seize opportunities to boost international connectivity in a post-Covid period.

Earlier, HSBC Malaysia chief executive officer Datuk Omar Siddiq said the current global market conditions have only accelerated the focus on shifting the world’s economic centre of gravity towards Asia, with the Asean region playing a critical role in fuelling this development.

“Located strategically in the heart of Asean, Malaysia continues to offer great potential for investors. Amid the challenges of 2022, the country was a clear regional outperformer fuelled by its resilient external engine and flourishing domestic demand.

“And, while HSBC Global Research expects 2023 growth to moderate to 4.0 per cent, this continues to be a very robust growth rate in this day and age,” he said in his opening remarks at the forum.

At the same time, Omar said, for organisations in the country to gain a competitive edge in a new era and to attract some investments, it will be imperative for them to capitalise on opportunities to strengthen their international connectivity, which will be critical to opening up access to growth and development prospects.

— Bernama

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