‘Belt tightening’ for 2019

Finance Minister Lim Guan Eng. – Bernama

GEORGE TOWN: Budget 2019, which will be presented in Parliament on Nov 2, will definitely be a “belt tightening” exercise, says Lim Guan Eng (pic).

“I agree with the Prime Minister, who used the term ‘sacrificial budget’ to describe it, as the government does not have any money to give out to the people.

“The 1MDB scandal had created a huge debt for the country and if we are not careful, it would result in a major financial crisis,” the Finance Minister said after a briefing on the Sales and Service Tax (SST) to businesses here yesterday.

On Saturday, Tun Dr Mahathir Mohamad described the Budget as Belanjawan Pengorbanan during the Parti Pribumi Bersatu Malaysia’s second anniversary celebrations in Shah Alam.

Lim said the government was forced to postpone or cancel certain projects, and abolish the Goods and Services Tax and replace it with SST, to handle the present economic situation.

The government, however, has kept the fuel prices low and would continue paying the BR1M, which is now called Bantuan Sara Hidup, he said.

“Even ministers had to take a 10% pay cut as we are grappling with the situation and incentives can only be given when the financial position improves,” he said.

On the possibility of increasing corporate tax, Lim said it was not the right time as any increase would make businesses less competitive and with the present financial situation, it was also not the right time to reduce the taxes.

“Countries like the United States reduced their corporate tax from 35% to 21% and we may reduce it at a later date,” he said.

Malaysia’s standard corporate tax is at 24%.

On the SST briefing, Lim said more than 11,000 businessmen attended the sessions nationwide and that many were now aware of how the system works.

“We are taking a softer, kinder and gentler approach in handling the SST as we trust the people would want to pay the taxes since a lot of exemptions were given for businesses.

“In several earlier briefings, I had to spend about four hours answering questions from the floor but today, it was only two hours as the people now understand it better.

“We will correct the flaws along the way and are fully aware of the problems faced by businesses,” added Lim.