Fiscal responsibility bill aims to keep country's debt in check, says MoF

Datuk Johan Mahmood Merican

KUALA LUMPUR: The planned Fiscal Responsibility Bill that will be tabled at the next parliament session will put into law some of the country's bigger picture financial targets, said the Finance Ministry's Deputy Secretary General of Treasury (Policy) Datuk Johan Mahmood Merican.

"Part of this involves having a fiscal charter - an overall debt limit that would capture all the debt such as government-guaranteed debt. This will come in time for 2023's budget," Johan said at the Invest Asean 2022 seminar titled Malaysia: Economy at Crossroads.

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Meanwhile, Johan also said that while no decision has been made yet for the implementation of the goods and services tax (GST), any consideration to reimplement the GST must also take into account the tax refunds.

"This is one area which needs to be enhanced - one key lesson that stands out are the efficiency of (GST) refunds. When refunds are slow, there is a tendency for producers to price in the lack of refunds so these price increases are higher than what our economic models have forecast," Johan said.

"Another thing for efficiency - is that the authority that collects indirect and direct taxes would tend to be one (the same). This also strengthens the tax authorities' ability to reduce leakages by having the ability to have access to both sales and profit data," he added.