Finance Minister calls on banks to ease lending criteria

  • Banking
  • Wednesday, 20 Mar 2019

Finance Minister Lim Guan Eng: Improved tax collection strategies and continued economic growth will ensure that Malaysia readily meets its fiscal consolidation objectives.

KUALA LUMPUR: Finance Minister Lim Guan Eng has urged banks in Malaysia to ease their lending requirements to reduce the difficulties faced by individuals and businesses to secure financing.

“Banks should be more more flexible in their lending arrangements. We get many complaints about banks being very conservative in lending, although they recorded huge profits last year with some of them posting their largest profits ever. We don’t have windfall taxes for banks in Malaysia. So, it is time for you to start lending unless you prefer windfall taxes,” he said during the Invest Malaysia forum yesterday.

Responding to a question on the proposed privatisation of certain segments of the civil service, Lim assured that no civil servants would be sacked in the process and that they would not lose any of their existing benefits.

Instead, some civil servants may be transferred to the new privatised entities, he said.

“In terms of timeline, it depends on the proposals offered and the discussion with the affected workers. “The process is in progress. It will not be done immediately without the consent from all stakeholders,” he said.

Lim also assured businesses in Malaysia that the RM37bil in tax refund arrears, previously unpaid during the Barisan Nasional administration, would be settled completely by October this year.

He pointed out that the government has begun to pay the arrears comprising the goods and services tax (GST) refunds and the income tax refunds over the last three months. Lim added that the bulk of the tax refunds would be settled using the one-off special dividend of RM30bil from Petronas.

“Under the previous government, the GST refunds were not paid for about two years, while some of the income tax refunds have been delayed much longer.

“It is a moral and legal imperative that we must return the money to the people, especially when the money does not belong to the government,” he said.

Of the total RM37bil tax refund amount, about RM19.47bil in the GST refunds was owed to 121,429 companies and individuals.

The remaining amount was unpaid income tax refunds.

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