By P PREM KUMAR
The introduction of the Sales and Services Tax (SST) in place of the Goods and Services Tax (GST) will result in a RM17 billion loss in the government’s coffers this year.
Finance Minister Lim Guan Eng said the government’s revenue this year is expected to fall short by RM21 billion with the absence of GST, but offset by RM4 billion revenue from SST between September and December this year.
“The net impact, therefore, is RM17 billion for 2018,” he told the Dewan Rakyat yesterday, in response to Bera MP Datuk Seri Ismail Sabri Yaakob who queried on the reduction in revenue following the abolishment of GST, as well as the government’s measures to cover the revenue shortfall.
Lim said the GST revenue shortfall will be partly made up by the higher petroleum revenue which is estimated at RM5.4 billion, following the rise in Brent crude prices to US$70 (RM291.20) per barrel compared to the average oil price assumption of US$52 per barrel for Budget 2018.
In addition, he said the dividend from government-linked companies, including Petroliam Nasional Bhd and Kha- zanah Nasional Bhd, has risen to RM5 billion.
Despite global crude oil prices hovering at around US$70 per barrel, Lim said petroleum-related revenue contributed only around 3.3% to GDP, compared to 9.2% in 2009 when global crude oil was at US$62 per barrel.
“This shows that the government has reduced its dependence on petroleum-related revenue,” he said.
Lim said other measures that could increase the federal government’s revenue include continuous audits and investigations by the Inland Revenue Board and the Royal Malaysian Customs Department to raise tax compliance, while reducing the tax gap.
He said the government will also explore new revenue sources, especially from online transactions, and review tax incentives to generate economic activity and minimise the impact of the revenue reduction.
Lim also stated that the stabilisation of prices of RON95 petrol and diesel at RM2.20 and RM2.18 a litre respectively, has resulted in lower prices for Malaysians, costing the government RM3 billion in fuel subsidies as of December this year.