KUALA LUMPUR (Oct 15): The Government will set off RM10.4 billion or 61% of the RM17 billion lost tax revenue for 2018 through additional oil revenue and dividends from Government-Linked Companies (GLCs), the Dewan Rakyat was told today.
Finance Minister Lim Guan Eng said there will be an estimated RM5.4 billion of additional petroleum-related income thanks to the rise in crude oil price to above US$70 per barrel, as against the US$52 average price used in Budget 2018.
“The additional dividends from GLCs, including Petroliam Nasional Bhd and Khazanah Nasional Bhd, is projected to be RM5 billion,” he added.
The Minister was replying to a question from Datuk Seri Ismail Sabri Yaakob (BN-Bera) on the revenue lost from the scrapping of the GST and the measures taken to cover the shortfall.
Lim said subsequent to the abolishment of the Goods and Services Tax (GST), the Government’s tax revenue is expected to decline by RM21 billion for 2018.
“The expected collection from the Sales and Services Tax (SST) between September and December this year is RM4 billion. Hence, the net impact to tax revenue for 2018 is RM17 billion,” he said.
On top of that, Lim said the government will ensure tax compliance through auditing and investigation by the Inland Revenue Board and Royal Customs Department.
“The Government will also explore new income sources, particularly from online transactions, and review tax incentives to generate economic activities while ensuring that the impact of the lower revenue does not get worse,” he said.
Lim said the Government has also rationalised public spending and streamlined government operations to increase efficiency and transparency.
“These efforts are expected to result in savings of RM10 billion. Hence, the Government is committed to the Pakatan Harapan election manifesto pledge of reducing the people’s burden due to the rising cost of living,” he said.
This is why the Government has maintained the subsidised retail petrol prices, which is expected to cost Putrajaya RM3 billion this year.