12MP review: Prudent fiscal handling, new taxes on the cards

Photo: Bernama

KUALA LUMPUR: Expansion of tax bases and government revenue streams, targeted subsidies and prudent fiscal management to better manage the country's finances are part of the agenda for the 12th Malaysia Plan (12MP) mid-term review.

While new taxes are on the cards, Prime Minister Datuk Seri Anwar Ibrahim gave assurance that those in need will be taken care of and aid given continuously.

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When tabling the review of the five-year development plan in the Dewan Rakyat on Monday (Sept 11), Anwar said fiscal reforms are needed to ensure that the country's finances are managed in a sustainable and effective manner.

This includes increasing the tax base and diversifying the revenue stream as well as managing the system through technology.

Capital gains tax is among the new taxes that will be implemented next year, he said.

"It must be emphasised that this government serves the people and will never burden the people with taxes that are beyond their means.

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"Our principle is to ensure fair economic equality for the well-being of the people.

"The government is also cognisant of the worries of some people who are affected by the burden of rising cost of living.

"The government aims to improve the mechanism of targeted subsidies as part of the Madani Economy (framework)," he said, adding that the government will fend for those under its administration, especially the low-income group.

On that note, Anwar said the targeted subsidy mechanism wold ensure that those in need benefit from the aid available.

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Energy and fuel subsidies and other social aid will be restructured to ensure prudent fiscal management, while the Pangkalan Data Utama (Padu) system, a database centred on household income data, will be used in the disbursement of subsidies.

"Savings from targeted subsidies will be redistributed through development projects and programmes," he said.

The government is also aiming to manage its debt and liability by narrowing its fiscal deficit to up to 3.5% of gross domestic product (GDP) by 2025, he added.

On that note, the Public Finance and Fiscal Responsibility Act will be tabled in the Dewan Rakyat in the next sitting which will commence in October.

Open tenders will also be prioritised to ensure better procurement practices, Anwar said.

Putrajaya will also review the country's development agenda including the public-private partnership (PPP) to ensure that projects implemented are beneficial to the people, will spur private investment and manage financial implications for the future.

The Dewan Rakyat convened for a six-day special sitting Monday for the 12MP mid-term review.

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