How might Mahathir fund Malaysia's budget without GST? Oil money

savemalaysia

Publish date: Wed, 16 May 2018, 01:41 PM

(May 16): A promise to scrap the goods-and-services tax helped Prime Minister Mahathir Mohamad win an election that led to Malaysia’s first change in government since independence.

Now, the question is how he will fund the nation’s budget without the 44.3 billion ringgit (US$11 billion) earned from the consumption tax in 2017 alone. The answer might lie in his coalition’s manifesto.

The Pakatan Harapan alliance pledged to set up a sovereign wealth fund using profits from state-owned oil company Petroliam Nasional Bhd to provide future welfare for the people and stability to the country. That may help the government balance its budget, as it moves toward scrapping the GST.

Petroliam Nasional or Petronas as it’s commonly known, will provide a minimum of 10 billion ringgit a year of its income to the fund, which will be managed with similar governance to the Norwegian investment fund, according to the coalition’s manifesto released in March. Other state-linked companies will also be required to channel their earnings to the fund, as long-term savings to the country.

That may go some way toward plugging the hole in the revenue left by the GST. Mahathir hasn’t said since the election if he will proceed with the plan. - Bloomberg

http://www.theedgemarkets.com/article/how-might-mahathir-fund-malaysias-budget-without-gst-oil-money

Discussions

Be the first to like this. Showing 8 of 8 comments

probability

Exactly....i definitely agree on this.

2018-05-16 14:14

bagan

Last years gst was 44bil while if they collect sst it will be around 18bil, there's shortage of 26bil with a deficit bgt, so genius elders need to figure out another tenths billions for fuel subsidy, free education and last but not least income tax collection that is expected to reduce since without gst businesses can cheat on their income tax that would be another 10bil.even if they cut gov servants by 500,000 heads this will give them savings of like 24bil a year.

2018-05-16 15:17

teoct

OK, while I do not disagree to the setting up of a sovereign fund like the Norwegian's, to get dividend or gain (assuming no loss? from investment) to plug the lost revenue of RM40B will need much more than the minimum RM10B.

Assuming a dividend yield of say, 8% (which I think is the top of the range) from such a fund, the seed money will need to be RM500B for dividend of RM40B.

I am not pouring cold water but to put thing in perspective and be more pragmatic and realistic please.

Of course the next question is what will happen to Khazanah? Can it not be change to one similar to the Norwegian? Disband? Just because it is not set up by PH?

2018-05-16 15:27

bagan

khazanahs dividend last year was less than 2% hahaha, its not my promise so its not my problem lets the geniuses figure out the solutions hahaha

2018-05-16 15:43

bagan

This is exactly the same team that covered up bank Negara losses, with a new black sheep finance minister who will be reporting to the parliament hahaha

2018-05-16 16:05

joekit

wanna scrap gst faster scrap lar....we oso vote pakatan to scrap gst ma.....who notchet buy car? expert say sst wil make car more expensive ah....faster buy lar....hahahaha

2018-05-16 16:09

hollandking

https://www.malaysiakini.com/news/425249
Prime Minister Dr Mahathir Mohamad today instructed the government to stop collecting goods and services tax (GST) and impose a fixed petrol price.

2018-05-16 16:11

wiki123

SST = 18bil, based on 2 to 3 years ago... now most prices have gone up, so SST collection is more after 2 to 3 years... plus Kak Mah's PMO budget is about 20b, so that easily combined can give 48b plus cut all the 17000 political contract if salary is 20k per month, that will save us 4 to 5b per year... plus many more savings everywhere...

2018-05-17 11:36

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