Economic Report 2016/2017: Govt to collect RM40bil from GST

THE Government expects to collects RM40bil from the Goods and Services Tax (GST) in 2017 as it continues to consolidate its fiscal position while promoting economic growth and carrying out rakyat-centric programmes and projects.

The GST collection is higher by 1.82% from RM38.50bil in 2016. The amount collected was RM27.01bil in the nine months of 2015 as it was implemented on April 1, 2015.

As for the fiscal deficit, it is projected to be RM40.3bil or 3% of GDP in 2017 compared with RM38.7bil or 3.1% in 2016.

Federal Government tax revenue:

More than four-fifth or 82.2% of the total Federal Government revenue of RM180.58bil in 2017 will come from direct tax revenue which comprises of corporate income tax, personal income tax and  petroleum income tax (PITA).

Of the direct tax revenue of RM120.739bil expected in 2017(which is an increase of 9.3% from RM110.50bil in 2016),  corporate income tax will account for RM69.193bil, individuals RM29.853bil and PITA RM10.637bil.

As for indirect tax revenue, it is expected to rise by 5.7% to RM59.841bil in 2017 (RM56.601bil) – with GST accounting for the largest contribution of RM40bil,  excise durties RM13.111bil, import duty RM3.008bil and export duty RM731mil.

Non-tax revenue is expected to decline 14% to RM39.146bil in 2017 (RM45.494bil) and account for 17.8% of Federal Government revenue. Non-tax revenue cxomprises of licences and permits at RM12.061bil and investment income RM17.591bil.

Federal Government operating expenditure:

Operating expenditure for 2017 is expected to increase by 3.7% to RM214.80bil (RM207.126bil) with emoluments accounting for the largest chunk at 36% or RM77.422bil. 

Retirement charges is projected to increase 14.6% to RM21.763bil; debt service charges to rise 7.5% to RM28.866bil; grants and transfers to state governments to expand 6% to RM8.058bil; supplies and services to rebound 7.8% to RM32.020bil.

Subsidies and social assistance will be reduced by 9% to RM22.431bil; grants to statutory bodies reduced by 27.4% to RM9.396bil; refunds and write-offs cut by 13.2% to RM802mil and Others increase by 12.5% to RM14.042bil. 

Federal Government development expenditure:

For 2017, the Federal Government development expenditure is expected to increase by 2.2% to RM46bil from RM45bil in 2016. 

A total of 56.2% of the RM46bil will go to Economic, Social 26.5%; Security 11.5% and General Administration.

Under the economic category, transport will get a 25.9% increase in allocation at RM10.599bil from RM8.419bil in 2016. Trade and industry will see a decrease in 17.8% to RM4.927bil from RM5.996bil; public utilities and energy will see their allocation decline by 21% to RM2.58bil; agriculture and rural development 16% lower at RM2.416bil.

Under the social category, eudcation and training will get a 52.4% increase to RM5.904bil; however allocation for housing will be reduced by 64.9% to RM870mil. However, health will increase by 3.4% to RM1.532bil.

Security will be allocated RM5.286bil, up 4.9%, in 2017 while general administration will be given a boost of 75.3% to RM2.671bil.