KUALA LUMPUR (Oct 15): The government has taken several proactive measures to demonstrate its transparency in managing the country’s finances, said Finance Minister Lim Guan Eng.
He said this includes the implementation of accrual accounting, the setting up of the Public Finance Committee (PFC) and the reintroduction of the Sales and Services Tax.
“The cash accounting system failed to give a true and fair picture of the previous government’s financial statement.
“Meanwhile, the PFC will enhance the effectiveness of the government’s financial management, thus sending a clear message to the people that the government will not borrow or misuse the people’s money,” he said in his opening speech at the National Taxation Seminar today.
He added that the government allocated RM19.4 billion in extraordinary expenditure for the reimbursement of the Sales and Services Tax and RM18.43 billion for income tax refunds.
Lim said as of Sept 30, 2019, taxpayers have received refunds totalling RM13.6 billion.
“I hope that those who have received their refunds will appreciate the government’s move and realise that the present government is telling the truth and is fulfilling its promises,” he said.
In addition to the PFC, the government had also established the Tax Reform Committee (TRC) to reduce the existing tax gap and improve the effectiveness of tax collection so that it will be in tandem with the nation’s economic growth.
“The TRC will also review tax incentives which have resulted in a loss in tax collection for the country, especially among big companies which have taken advantage of the incentives and received tax exemptions,” he said.
Lim added that under the 2019 Budget, the government has undertaken fiscal consolidation by reviewing fiscal deficit as a percentage of gross domestic product (GDP) to improve competitiveness and the people’s well-being.
“Last year, the government announced a fiscal deficit target of 3.0 per cent for 2020. However, the increasing risk of global economic slowdown and the unexpected expenditure to rescue problematic institutions inherited from the previous administration required early fiscal measures,” he added.
In his 2020 Budget presentation on Friday (Oct 11), Lim said the government has revised the fiscal deficit target to 3.2% of the GDP for 2020.
“The government expects fiscal deficit to contract to an average of 2.8 per cent of GDP over the medium term,” he added. — Bernama