Corporate income tax (CITA) is expected to increase by 1.3% to RM70.18bil from RM70.53bil. The main contributor to CITA collection is from the services sector primarily from the financial services.
THE government forecasts its fiscal deficit to decline to 3.4% in 2019 from 3.7% this year underpinned by much higher revenue collection, especially from investment income.
In the report, it said federal government revenue was expected to increase by 10.7% to RM261.81bil from RM235.45bil this year.
Operating expenditure is expected to increase by 10.4% to RM259.85bil from RM235.45bil this year.
Development expenditure is forecast to dip by 0.5% to RM54.04bil from RM54.33bil this year as the government reins in its spending.
Tax revenue
It said total federal government revenue, including special Petronas dividend, is forecast at RM261.8bil or 17.1% of GDP. This is an increase of 10.7% from RM236.46bil this year.
Direct tax collection, which constitutes 76.7% to tax revenue is estimated at RM135.1bil – an increase of 1.2% compared with 2018 revised estimates of RM133.47bil.
“This is mainly contributed by higher collection from petroleum income tax (PITA) of RM18.08bil compared to RM16.84bil estimated in 2018 on account of modest assumption of crude oil price,” it said.
Income tax
Individual income tax is expected to be marginally higher by RM34.95bil compared with RM34.80bil this year.
Corporate income tax (CITA) is expected to increase by 1.3% to RM70.18bil from RM70.53bil. The main contributor to CITA collection is from the services sector primarily from the financial services.
Revenue from other direct taxes comprising stamp duties, RPGT and other taxes is expected to increase by 4.4% to RM8.2bil.
The increase in stamp duties and real property gains tax (RPGT) to RM6.3bil and RM1.8bil are in line with the expected stable property market.
Indirect tax
Indirect tax collection is forecast to decline slightly to RM41.08bil from RM41.22bil. However, the reintroduction of the Sales and Service Tax (SST) is estimated to see collection improve by 6.4% to RM11.4bil due to higher demand for vehicles.
Export duty is expected to remain flat at RM1.60bil while import duty is projected to grow 5% to RM2.94bil from RM2.80bil due to estimated duty collection on completer-built-up motorcars, machines and spare parts, resin and plastic materials.
Non-tax revenue
Licences and permits and also investment income are expected to increase by 38.7% to RM85.66bil from RM61.76bil. Of the Non-tax revenue expected to be collected in 2019, investment income is expected to jump 61.2% to RM59.52bil from RM36.93bil. Licence and permits are expected to generate RM15.56bil in revenue, an increase from RM14.68bil.
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