Finance minister Tengku Zafrul Aziz said improvements will also be made to prevent any confusion in the classification of taxable versus non-taxable goods and to enhance the skills of government officials.
“Any new taxation system must first be approved by Parliament. If we take into consideration the requirement for public engagement as well as improvements to the existing system, it is doubtful that the GST can be implemented this year,” he said in the 98th Laporan Kewangan Rakyat (financial report) released today.
Tengku Zafrul noted that the national revenue collection as a percentage of gross domestic product (GDP) last year was relatively low at 15.1%. Tax revenue, meanwhile, stood at 11.2% of GDP.
Hence, he said, the government needs to make efforts to broaden its revenue base in order to distribute it in a more meaningful manner via development programmes that will benefit all the people.
“However, before the government introduces any new tax, it must ensure that the economic recovery post-Covid-19 is on a stable and solid track,” he added.
On the 2023 budget, Tengku Zafrul said it will, among others, focus on facilitating full employment and re-employment and social protection for those who are self-employed and working in the informal sector.
It will also give specific focus on the employment and re-employment of certain people, including unemployed graduates, women who left the labour force, persons with disabilities, and the long-term unemployed.
The minister said focus will also be given to skills upgrading and reskilling programmes.
“Interventions are also required to ensure basic food security to curb the surging prices of basic necessities.
“In summary, the budget will continue to support economic growth and focus on reforms to improve the rakyat’s wellbeing, income and social protection, as well as the competitiveness of Malaysian businesses.
“It will also strengthen the government’s fiscal position and the nation’s resilience to withstand future shocks,” he added.
Sufficient funds
Earlier, after the launch of the “Khazanah Sustainability Framework & Targets: Investing in a Sustainable Transition 2022” here today, Tengku Zafrul said the government still has sufficient funds to continue providing the fuel subsidy to the people despite rising global crude oil prices.
“Our inflation target this year is still within what we have said before, that is between 2.3% and 3.3%.”
However, Tengku Zafrul said the government intended to implement a targeted oil subsidy. Last month (May), the fuel subsidy had already reached RM5 billion a month.
Tengku Zafrul said the government had no intention of asking for an additional dividend from Petronas to bear the subsidy at the moment.
“We will consider all options. Companies like Petronas have announced a strong financial position but whether we will ask for more dividends from Petronas has not yet been discussed.
“The government’s revenue has also increased although the increase is not as high as the increase in subsidy.”