Malaysia Finance Minister Lim Guan Eng said that the government does not have any money to give out to the people for the upcoming Budget 2019 which will be presented in Parliament on Nov 2. He was speaking after a briefing on the Sales and Service Tax (SST) to businesses.He said, “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.” 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. (I continue to think GST is a better tax system than the SST but then again, as a Malaysian, I will support SST and hope it gives the government the tax revenue it is looking for) perhaps SST is the better choice currently?) Here’s the full article in TheStar.com.my
He shared that the government has kept fuel prices low and will continue paying the BR1M, now known as Bantuan Sara Hidup. He said that even ministers had to take a 10 percent pay cut and incentives can be given only when the financial position improves. As for the corporate tax, Lim said that it would not be increased because it will make businesses less competitive while reducing it is also not possible under the present financial situation. He said, “Countries like the United States reduced their corporate tax from 35% to 21% and we may reduce it at a later date.” Malaysia’s standard corporate tax is at 24%. With regards to the SST, he said, “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.(I think what he wanted to say is that if you need to pay, you better pay.) Here’s the full article in TheStar.com.my
Oh dear, Budget 2019 is a ‘belt tightening one’
It’s always good for the business to have a positive outlook. When the sentiment is negative, it will affect the way we consume and on a longer term, it’s not healthy for the economy. Remember yeah, when the people stops consuming, the businesses suffer and the tax revenue decreases too. When we look at the property market and we look at some launches at the right price point, they are usually snapped up very fast. However, on general people are much more cautious and the decision to buy is now further delayed. My real estate negotiator(REN) friend said that it’s now easily 10 viewings before one closure and times are not easy. I reminded him that this is why RENs need to provide consultative service to the potential buyer, to also update him about property investment and not just opening doors and let the customer view the unit. Anyway, let’s wait for the budget 2019 then. It’s a Future Strengthening Budget. (better name than belt-tightening). Cheers.
written on 10 Sept 2018
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