Federal govt revenue likely to increase marginally


THE federal government expects revenue to increase marginally by 0.8% to RM222.5bil in 2015, while its share to gross domestic product (GDP) is projected to sustain at 19.2% amid lower collection from oil-related revenue and non-tax revenue.

The Government continues to strengthen its fiscal management by broadening and diversifying the revenue base, particularly with the implementation of the GST.

Its indirect tax revenue is expected to surge 42.2% to RM53.3bil driven by the implementation of GST.

The number of registered companies have increased to 390,378 as at September 2015.

This is compared with a lower initial estimate of 146,000 companies.

The higher number of registrants will lead to improved tax compliance among companies, says the report.

From January to March 2015, the Government collected sales and service tax amounting to RM7.6bil.

Tax revenue contributes 76.4% to Federal Government revenue, and is expected to increase by 3.5% in 2015 to RM170bil, and remain high at 15.1% of GDP.

Direct tax, which makes up for 52.5% of total revenue, is expected to decline by 7.9% to RM116.8bil in 2015 due to lower Dated Brent price averaging US$50 per barrel. However, corporate income tax is expected to increase by 4.7% to RM68.3bil, on the back of better tax compliance.

Individual income tax is also foreseen to grow by 15.3% to RM28.2bil, underpinned by stable employment and wage growth.

Petroleum income tax is expected to decline to RM9.5bil due to lower crude oil prices. Also, the real property gains tax is expected to increase to RM2.1bil due to the revision of tax rates and higher property value.

Non-tax revenue is seen to fall by 7.1% to RM52.4bil due to lower receipts from petroleum royalties. Investment income, contributed mainly by Petroliam Nasional Bhd, Bank Negara and Khazanah Nasional Bhd remains the largest component in non-tax revenue with a 61.4% share.

The Government is putting in more effort towards reducing its reliance on oil-related revenue.

It expects the share of oil-related revenue to further decline to 19.7% of total revenue in 2015 due to the sharp drop in crude oil prices.

The share of oil-related revenue to total revenue has declined from 41.3% in 2009 to 30% in 2014, though average crude oil prices remained high at US$95 per barrel during the period.

Meanwhile, the share of non-oil revenue grew from 58.7% in 2009 to 70% in 2014 and is expected to increase to 80.3% in 2015.

In terms of share to GDP, oil-related revenue is estimated to come in at 3.8% while non-oil revenue at 15.4% in 2015.

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Business , Economic report , GST , revenue , tax

   

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