Nation's finances hanging in the balance

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All eyes are on Budget 2019, which is to be tabled in Parliament by Finance Minister Lim Guan Eng on Nov 2.

The end of the tax holiday with the reintroduction of the Sales and Services Tax (SST 2.0) on Sept 1 could cut short the patience of the people, especially those keeping tabs on the delivery of promises made in Pakatan Harapan's election manifesto.

But cash is short. Not only has the national debt exceeded RM1 trillion but the government will also need to contend with less revenue next year, including the RM23 billion shortfall arising from replacing the Goods and Services Tax (GST) with SST 2.0.

The government's coffers will also see less money due to the need to repay or offset RM19.25 billion in GST input tax refunds owed to 121,429 companies and individuals as well as RM16.05 billion of excess income tax and Real Property Gains Tax owed to 1.65 million companies, individuals, societies, associations and foundations.

Malaysia may well need to borrow more money to fund immediate needs while waiting for new revenue to come in. Can zero-based budgeting help the country escape its structural deficit and put its finances on a sound footing?

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