The RM22 bil ‘hole’
I believe we are short of RM22 billion for 2016 just by looking at the Government’s revenue which will be affected as a result of GST and crude oil prices, ceteris paribus.
A Piece of My Mind
Budget 2016 is not too far away and Government agencies – especially Treasury and the Economic Planning unit – have begun the preparations since March. It should be tabled in Parliament in 4 months time in October.
I decided to look at some numbers and back of the envelope calculation, I found a RM22 bil ‘hole’ or deficit.
No, I am not even talking about the annual budget deficits at over RM30 bil.
I believe we are short of RM22 billion for 2016 just by looking at the Government’s revenue which will be affected as a result of GST and crude oil prices, ceteris paribus.
And I hope the Government is aware of this. I stand corrected.
GST Revenue
This year, GST revenue is expected to contribute RM23.3 billion (that’s what the Government said before so many other things were exempted from GST)
And with GST in place, we must not forget that the Government has agreed to forego some revenue.
The abolished Sales and Services Tax gave us RM17.2 billion last year.
The Government announced that individual income tax rates will be slashed by 1-3 percent. Let’s just assume it is a 1% reduction, that’s estimated to be a loss of revenue of RM260 million.
Companies will enjoy a 1% tax reduction. That’s another RM728 million gone.
The net gain from GST implementation stands at no more than RM5 billion.
