PETALING JAYA: The Government is establishing two new committees – the Public Finance Committee (PFC) and the Tax Reform Committee (TRC) – as it strives to lower the fiscal deficit without hurting economic growth.
Finance Minister Lim Guan Eng (pic) said the PFC would outline the Government’s medium-term fiscal plans and become the platform for balancing the need for fiscal consolidation with the necessity of spending to stimulate growth and raise the living standards of the rakyat.
The PFC will be chaired by Lim, and he will be joined by Economic Affairs Minister Datuk Seri Mohamed Azmin Ali and Bank Negara Governor Datuk Nor Shamsiah Mohd Yunus.
“Despite various legacy challenges, the federal government is steadfast in lowering fiscal deficit to 2.8% of GDP this year.
“We will proceed with our fiscal consolidation agenda gradually in a more sustainable manner without hurting economic growth or the well-being of the rakyat.
“To that end, the federal government is establishing two new committees – the PFC and TRC,” he said in a statement Wednesday (Aug 29).
He said the TRC, on its part, would assess the Malaysian taxation system holistically, aiming to make it more efficient, neutral and progressive without burdening the rakyat.
It would also promote the long-term productivity of the economy.
Lim said the committee would be studying measures like minimising tax leakages and tax evasion.
“To augment these measures, the federal government will monetise some of its holdings in non-critical, non-strategic companies in an orderly fashion while engaging in planned and scheduled public auction of state land.
“Previously, these land assets were often sold at steep discounts to politically connected entities under opaque arrangements, which deprived the federal government of additional revenue,” he said.
Meanwhile, Lim also touched on the effects of the trade war between China and the United States.
He said that if China and the US could agree to resolve their trade disputes, the Malaysian capital market and the value of the ringgit would rise.
“If no deal could be reached, the reverse would happen. The Malaysian government is monitoring this particular global development intently and is prepared to act accordingly if needed to protect the well-being of the rakyat,” he said.