Wahid: Gov’t to cut dependence oil revenue

(Bernama) – The government is looking to reduce its dependency on oil revenue to below 30 per cent by broadening the tax base, said Minister in the Prime Minister’s Department, Abdul Wahid Omar.

He said reducing the dependency on oil revenue would be plausible by improving the collection of other forms of tax revenue and by broadening the tax base with the goods and services tax.

Abdul Wahid, however, declined to specify a time frame for the target.

“We have commenced to diversify revenue sources and strengthened revenue collection. The government’s revenue was 12.1 per cent higher at RM207.9 billion in 2012 from RM185.4 billion in 2011.

“In 2013, revenue increased further to RM220.4 billion, with the contribution from oil revenue reduced to 31.2 per cent compared with 33.7 percent in 2012 and 35.8 per cent in 2011,” he told reporters after officiating the Cekal 2014 Entrepreneurial Symposium here today.

On oil and gas resources, Abdul Wahid said the government had been managing them in a responsible and sustainable manner to ensure the overall resource replenish (ORR) ratio is maintained at above one, whereby Malaysia’s current rate is at 1.94 times as of January 2014.

He said this current ratio ensures that Malaysia’s reserves will continue far into the future.

“Based on daily production levels of 576,000 barrels of oil and condensates, our oil reserves of 5.79 billion barrels of oil equivalent (BBOE) is sufficient for the next 28 years while our current gas reserves of 16.8 BBOE will be good for the next 42 years,” he said.

Meanwhile, Abdul Wahid said the government also sought to increase employees’ share of the gross domestic product to 40 per cent, driven by the Economic Transformation Programme and to be on par with developed economies, from 32.9 per cent currently, which is significantly higher compared with 29 percent in 2008.