The government could reduce its dependency on the oil and gas sector by having additional revenue raised through the Goods and Services Tax (GST), says an economist.
RAM Holdings Bhd Group Chief Economist Dr Yeah Kim Leng said the GST would provide the government with greater flexibility to balance its budget as well as to increase spending to stimulate the economy if the need arises.
Revenue from the oil and gas sector currently accounts for 40 per cent of the countrys revenue collection, he said.
Similar to other forms of taxes, Yeah said Malaysians reap the benefits in the form of services including health, security and education, in return for sharing the GST tax burden roughly in proportion to what they spent on.
"The government need not cut back on spending in these areas if additional revenue can be raised through GST. Besides the direct benefits, the indirect, economy-wide benefits of GST are equally important," he told Bernama.
To maintain the current spending level without GST, Yeah said other taxes such as corporate and individual income taxes would have to rise or else the fiscal deficit and debt level would worsen further and put the country at risk from a sudden loss of investor and market confidence.
In the region, Malaysia is among the four countries other than Hong Kong, Brunei and Myanmar that have yet to implement the GST to enhance government revenue.
In a research note recently, RHB Research said the high dependency on oil revenue makes the government vulnerable to the fluctuation of international crude oil prices, which is beyond its control.
"A sudden and significant drop in crude oil prices will likely strain the fiscal position dramatically, as much of the government's expenditure is sticky downward and could not be cut easily," it said.
In 2009, the government experienced a sharp drop in crude oil price by 38 per cent when oil revenue accounted for close to 40 per cent of its revenue.
However, it managed to cushion the impact via the change of tax on petroleum income from the preceding year to the current year in 2010.
The crude oil price only fell briefly and it bounced back in 2010.
"Nonetheless, the government may not have the luxury, if it happens again. We believe the government needs to make a tough decision to reduce its subsidies to a more sustainable level as in the early 2000s," added RHB Research.
Bernama
Thu Jul 11 2013
Rusia, Malaysia jalin kerjasama dalam pelancongan mesra Muslim
Rusia dan Malaysia sedia utingkatkan pelancongan mesra Muslim menerusi kerjasama baharu antara badan pensijilan halal Rusia, Roskachestvo dan Pusat Pelancongan Islam Malaysia.
IShowSpeed tiba di KL, terima baju batik daripada peminat
Speed menerima hadiah daripada beberapa orang peminat Malaysia ketika kenderaannya berhenti di lampu isyarat di ibu negara pada Selasa,
Penyanyi Sean Diddy ditangakp di New York
Penerbit muzik terkenal, Puff Daddy atau lebih dikenali sebagai Sean Diddy Combs yang berdepan dengan beberapa tuduhan serangan seksual telah diberkas di Manhatann, New York oleh ejen persekutuan pada Isnin waktu tempatan.
10 maut, puluhan cedera bas Iran terbalik
Menurut angka awal, kemalangan itu mengakibatkan 10 maut dan 41 cedera.
Malaysia perlu melabur dalam infrastruktur
Pengarah Eksekutif Ukrainian Prism, Hennadiy Maksak berpandangan, Malaysia juga tidak boleh bergantung kepada satu laluan, selain menjalin hubungan yang baik dengan negara-negara jiran.
Lebih 1,000 rakyat termasuk pejuang Hezbollah cedera parah
Lebih seribu rakyat Lubnan termasuk anggota pejuang Hezbollah dan petugas perubatan cedera parah dalam satu letupan pada Selasa.
Tetingkap Tunggal Nasional memudahkan operasi perdagangan antara Malaysia dan China
Menteri Pelaburan, Perdagangan dan Industri (MITI), Tengku Datuk Seri Zafrul Tengku Abdul Aziz berpendapat inisiatif Tetingkap Tunggal Nasional (National single window) yang bakal diharmonikan Bersama system kastam China akan memudahkan operasi perniagaan dan perdagangan (ease of doing business) antara Malaysia dan China.
Medan selera perlu ditambah baik, kemudahan asas tidak lengkap
Air bergenang di lantai dan tempias sehingga meja makan mengakibatkan pengunjung basah. Itu situasi apabila keadaan hujan lebat di Medan Selera Taman Makmur di dalam Dewan Undangan Negeri (DUN) Mahkota yang menempatkan deretan 12 kedai makan.
Calon manfaat platform media sosial dekati pengundi luar
Kempen Pilihan Raya Kecil (PRK) Dewan Undangan Negeri (DUN) Mahkota turut memberi tumpuan kepada penggunaan media sosial bagi menambat hati pengundi luar selain kempen secara bersemuka.
Seorang wanita maut jatuh lubang saluran air
Seorang wanita maut selepas terjatuh ke dalam lubang saluran air sedalam dua meter ketika menyertai aktiviti mendaki di Bukit Cherok Tok Kun pada Selasa.