Ong on how govt will make up for GST shortfall

30 May 2018 / 11:43 H.

PETALING JAYA: The government has its work cut out to make up for zero-rating the Goods and Services Tax (GST) that will result in a shortfall of RM21 billion a year.
Bangi MP Ong Kian Ming (pix) today said it would look for new sources of revenue and reducing expenditure.
The special officer to the finance minister said the government would seek to boost revenue from higher corporate taxes, most likely from Petronas, due to the increase in global oil prices which are presently at US$70 (RM280) per barrel compared with the US$52 (rm207) per barrel projection for the 2018 budget.
In an interview with radio station BFM, Ong said the government could collect RM8 billion to RM9 billion in increased special dividends from Petronas.
"Other sources of revenue may be from increases in dividends paid for by Bank Negara and Khazanah Nasional," he said.
Ong said infrastructure projects where a letter of offer had not been given, like the Klang Valley Double Tracking project to upgrade the KTM, could be reviewed.
"This project was awarded through direct negotiation and not open tender. It costs RM2 billion to RM3 billion. This is an example of projects that will be reviewed, and either postponed or cancelled."
Ong said the Sales and Services Tax (SST) to replace the GST would likely be introduced in September.
"We will make it more streamlined and we may reduce the exemptions so there are less grey areas where people lobby the finance ministry for exemptions," he said.
"Even though the SST rate may be 10% compared with the GST's 6%, the SST is not charged on all goods, only at the manufacturing stage. It's not a consumption tax."

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