It shows that the economy is still strong although the shortfall compared to GST collection leaves a gap of RM17b, says Lim

by DASHVEENJIT KAUR / pic by MUHD AMIN NAHARUL

THE government’s RM27.5 billion collection in Sales and Services Tax (SST) revenue last year surpassed the targeted RM22 billion, a proof of the country’s resilient economy, said Finance Minister Lim Guan Eng.

“It shows that indeed, the economy is still strong although the shortfall compared to the previous Goods and Services Tax (GST) collection of RM44 billion, leaves a gap of RM17 billion.

“Rightfully, the gap is about RM9 billion, because from this amount, almost half are refunds which was supposed to have been paid,” he said after a meet-andgreet session at the Royal Malaysian Customs Department (RMCD) yesterday.

Lim was referring to the input tax refunds for the repealed GST which he previously accused Barisan Nasional of spending.

The SST revenue target for this year will remain the same at RM27.5 billion, Lim said.

“Everything is planned fiscally and according to fund managers and foreign investors, they are quite confident that we can achieve our target.

“Market watchers are probably more concerned about other factors such as the trade war and IranUS conflict which is now being de-escalated,” he added.

Malaysia’s 2018 SST collection by the RMCD amounted to RM5.4 billion, which is 34% higher than the RM4 billion target set during its implementation on Sept 1, 2018.

Lim also shared that last year’s fiscal deficit target of RM52 billion was achieved completely.

“The RM52 billion is 3.4% of Malaysia’s GDP and it was achieved 100%,” he added.

On a separate matter, Lim said the government has opted to continue freezing highway toll rate hikes this year, which will cost the government more than it did in 2019.

The freeze on toll hikes for highways and the abolition of motorcycle tolls last year had cost the government RM994.43 million.

The freeze in 2019 involved 21 highways and buses on eight additional highways.

“Although the government froze toll hikes this year, the people must remember that when the toll hike is frozen, the government must pay the losses incurred.

“This is burdensome to the government, but we want to control living costs and help the people, even if it would cost us more than last year’s amount,” Lim added.

On the proposed takeover of four Klang Valley highways as well as the offers on the table for PLUS Malaysia Bhd, he reiterated that it is still in the discussion stage with the Cabinet.

“We will let the people know in an official announcement. I cannot be giving off-the-cuff statements. For now, there is no indication on when the announcement will come. If it comes, it will,” he said.

To-date, the government has received five offers for PLUS, the country’s largest highway operator, managing over 1,100km of highway.

In December 2019, Works Minister Baru Bian said the Cabinet had requested a retabling of the details on the takeover bids as Prime Minister Tun Dr Mahathir Mohamad wanted a systematic review before a decision is made.

Lim said the finance ministry worked alongside government-owned Khazanah Nasional Bhd, the Employees Provident Fund (EPF) and other ministries for one of the bids.

The joint Khazanah-EPF proposal would see a minimum reduction in tolls of 18% which, he said, showed the Pakatan Harapan administration was serious in fulfilling its election promise of abolishing tolls gradually.

“The final decision must be a triple win which would meet the expectations of the government, highway owners —Khazanah and EPF — and road users,” he added.

During the Budget 2020 presentation, Lim announced a reduction of toll rates by at least 18% on all PLUS highways. The move would result in savings of up to RM1.13 billion this year for road users and RM43 billion over the entire concession period until 2038.