Con­tri­bu­tion from pe­tro­leum sec­tor will al­most dou­ble to some RM60b

The Borneo Post - - HOME -

KUALA LUMPUR: The revenue de­rived from the pe­tro­leum sec­tor this year will al­most dou­ble to an es­ti­mated RM60 bil­lion against RM38 bil­lion raked in last year, thanks to the steady rise in global oil prices which is cur­rently hov­er­ing around US$ 79.41 per bar­rel.

This is good news for Malaysia, which is a net oil ex­porter of oil. It will also com­ple­ment the newly- formed govern­ment’s pledge to abol­ish the six per cent Goods and Ser­vices Tax.

Her­mana Cap­i­tal Bhd chief ex­ec­u­tive of­fi­cer and chief in­vest­ment of­fi­cer Datuk Dr Nazri Khan Adam Khan opined that the RM38 bil­lion revenue was earned from the pe­tro­leum sec­tor when crude oil prives were fetch­ing US$ 52 per bar­rel.

“That (the revenue) is like 15 per cent of govern­ment revenue … and with oil prices now trad­ing at about US$ 80 per bar­rel, the govern­ment’s pe­tro­leum revenue would likely in­crease to 25 per cent. And, this revenue does not in­clude the div­i­dend ac­crued from Petronas,” he told Ber­nama yes­ter­day.

Be­sides, the govern­ment would also have ad­di­tional revenue now with the re-in­tro­duc­tion of the Sales and Ser­vices Tax (SST).

The Fi­nance Min­istry yes­ter­day said fis­cal re­form ini­tia­tives are un­der way fol­low­ing the an­nounce­ment that the GST would

That (the revenue) is like 15 per cent of govern­ment revenue … and with oil prices now trad­ing at about US$80 per bar­rel, the govern­ment’s pe­tro­leum revenue would likely in­crease to 25 per cent. Datuk Dr Nazri Khan Adam Khan, Her­mana Cap­i­tal Bhd chief ex­ec­u­tive of­fi­cer and chief in­vest­ment of­fi­cer

be zero- rated ef­fec­tive June 1, 2018.

Fol­low­ing the abo­li­tion of the tax regime, the Pakatan Hara­pan-led govern­ment, which had promised to elim­i­nate the GST in the first 100 days af­ter tak­ing of­fice, would in­stead re-in­tro­duce the SST.

Un­der for­mer Prime Min­is­ter Datuk Seri Na­jib Tun Razak’s ad­min­is­tra­tion, , the govern­ment col­lected RM44 bil­lion from GST in 2017, slightly higher com­pared with RM41 bil­lion in 2016.

The six per cent GST was im­ple­mented on April 1, 2015 to re­place the SST in Malaysia which was among 160 other coun­tries which had al­ready im­ple­mented it.

Na­jib had said then that with the in­tro­duc­tion of the GST, the govern­ment would be able to re­solve weak­nesses in the cur­rent tax­a­tion sys­tem such as the im­pact of dou­ble tax­a­tion, ab­sence of full tax re­lief on ex­ported goods and is­sues over trans­fer pric­ing.

“If we were to buy a car­bon­ated drink in a restau­rant to­day, we are pay­ing dou­ble taxes – sales tax and ser­vice tax,” he pointed out. “With the GST sys­tem, con­sumers will only need to pay tax once, and the price of goods should be cheaper,” he was quoted as say­ing when pre­sent­ing the 2014 Bud­get in Par­lia­ment.

The tax was in­tro­duced on 553 types of zero-rated goods and ser­vices while an­other 25 were GST- ex­empt. Nazri said the abol­ish­ment of the GST would boost the econ­omy, buy­ing sen­ti­ment and also re­duce prop­erty prices.

Mean­while, for­mer Bank Ne­gara Gov­er­nor Tan Sri Zeti Akhtar Aziz had said Malaysia would be able to meet its revenue re­quire­ments even af­ter shelv­ing the GST by pri­ori­tis­ing projects, in­creas­ing pub­lic sec­tor ef­fi­ciency, avoid­ing wastage and ex­plor­ing new sources of revenue.

Say­ing that the Malaysian econ­omy was stead­fast, she ex­pressed con­fi­dence that it can be steered to­wards the right di­rec­tion and the 100- day time frame was ad­e­quate to pro­vide clar­ity and make nec­es­sary ad­just­ments and changes. — Ber­nama

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