KUALA LUMPUR: Datuk Seri Najib Tun Razak had on Thursday announced the revised Budget 2016 in the face of the fall in crude oil prices which has affected the government's revenue.
The Prime Minister said the government revenue would be based on Brent crude oil at US$30 to US$35 per barrel when compared with the US$48 when it prepared the Budget 2016 last year.
He also said the economy was expected to grow at a slower pace of between 4% and 4.5% when compared with the earlier forecast of 4% to 5%.
Later, Ministry of Finance Secretary-General Tan Sri Dr. Mohd Irwan Serigar Abdullah said the recalibrated Budget 2016 remains on track even if Brent crude oil prices were to deteriorate further to US$25 per barrel
Main points of Budget 2016 revision:
- Revised Budget 2016 will enable the government to save RM9bil
- Govt will maintain the Goods and Services Tax
- Fiscal deficit target at 3.1% of GDP
- Govt revenue to be based on Brent crude oil at US$30 to US$35 per barrel from US$48
- Trimmed GDP growth outlook for 2016 to 4%-4.5% from 4%-5%
- Govt debt to be reduced to 55% of GDP
- Govt will not peg the ringgit
- Govt to reduce EPF contributions for employees by 3% from March 2016 to December 2017, contributors from employers unchanged
- Govt to give special tax relief of RM2,000 to individual tax payers earning RM8,000 a month for year of assessment 2015
- Malaysia to restructure foreign labour system
- Govt to give special tax exemption for some selected income groups
- Govt to allocated RM5bil for the Higher Education Fund (PTPTN)
- Govt will liberalise the control on import quotas or approved permits for eight agricultural produce for temporary period. It includes raw coffee beans, buffalo meat, beef and mutton
- To enhance the efficiency and amount of tax collection, govt will double compliance and auditing efforts on tax evaders
- Govt to give special consideration on relaxation for penalty on taxpayers to encourage them to come forward and declare their past years’ income. The tax arrears must be settled before 31 December 2016.
- For duty-free islands, to reduce leakages which resulted in revenue loss of nearly RM1bil, the government will restructure the selling channel of cigarettes and liquors limited to duty-free outlets licensed by the Royal Malaysian Customs Department (RMCD)
- The free duty treatment on imported vehicles in duty-free islands will be tightened.
- However, the restructuring of sales on cigarettes, liquors and vehicles will not affect the tourists and locals who are residing in these duty-free islands
- Govt will optimise the revenue from the telecommunication spectrum through a redistribution and bidding process which will be implemented soon