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Friday, November 1, 2013

Budget 2014 shows govt's commitment in reducing fiscal deficit: EPF

Posted on 25 October 2013 - 09:26pm
Last updated on 25 October 2013 - 10:31pm
PETALING JAYA (Oct 25, 2013): The Employees Provident Fund (EPF) has expressed confidence with the government's commitment in reducing fiscal deficit, said its deputy CEO (Investment) Mohamad Nasir Ab Latif in a statement today.

He noted that fiscal deficit has been reduced steadily from a high 6.7 per cent during the global financial crisis in 2009 to 4.5 per cent in 2012, and is expected to decline further to a targeted 4 per cent and 3.5 per cent in 2013 and 2014, respectively.

"Higher than expected revenue this year has shown effective enforcement as the government has been implementing various measures to improve revenue collection, such as auditing tax and enhancing compliance," he said.

He also applauded the government's effort to undertake "a holistic review of the tax system and broader tax revenue by introducing the Goods and Services Tax (GST)".

"With a broad-based GST, the taxation burden will be more evenly distributed and also helps to reduce its dependent on petroleum-based revenue," he said.

Other than revenue enhancement, the EPF is also satisfied with the government's prudent financial management of its operating expenditure through continuous subsidy rationalisation programme as well as cutting down on wastage.

"Rationalising subsidy at a gradual pace is proof that the government is spending more prudently by having a focused target group, low-income households, without burdening consumers," he said.

"The establishment of the Fiscal Policy Committee (FPC) in mid-June 2013 also shows that the Prime Minister is serious in addressing fiscal challenges in the near term and over a longer period."

He said the EPF also welcomes the government's proposal to increase government contribution to the 1Malaysia Retirement Scheme (Skim Persaraan 1Malaysia or SP1M) from 5 per cent to 10 per cent or from a maximum of RM60 to RM120 per year, effective 1 January 2014 until end 2017.

The SP1M was implemented on 1 January 2010 for individuals who are self-employed and those without a fixed monthly income.

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