Posted on 22 October 2009 - 04:21am
KUALA LUMPUR (Oct 21, 2009) : Budget 2010 must continue to stress on low-and middle-income earners as they are severely hit by the global economic crisis, says a member of the National Economic Advisory Council (NEAC).
Datuk Dr Zainal Aznam Mohd Yusof said these people are struggling to make ends meet as the country's economy was still in recession.
"We may have reached the bottom of the recession but the recovery is not going to be that fast. We still need government help through fiscal policies to give some support to the low-income group.
"I feel priority should be given to the low-income group as they have been badly hit by the recession. People were laid off, increments were frozen and savings depleted.
"Hence, Budget 2010 should re-visit on how to give them some form of assistance," said the former World Bank consultant in the run-up to the 2010 Budget.
Prime Minister Datuk Seri Najib Abdul Razak, who is also inance minister, will table next year's budget in Parliament on Friday.
On calls to reduce corporate tax, Zainal Aznam said it may not be possible as the government is expected to shoulder a bigger fiscal deficit this year at 7.6% while grappling with declining revenue.
"You have to look again at the bigger picture when you talk about the proposal to reduce taxes because the government's fiscal deficit is quite high.
"It's one of the highest in South East Asia and Asia," he said.
Zainal Aznam said tax reduction proposals should take into account the fiscal deficit as revenue was very important.
He said the proposed Goods and Services Tax (GST) fits into the criteria in putting in place a broad-based tax system to boost government revenue which would benefit the low-income group.
"The crucial question now is how low or how high will be the rate for the GST. This is something the people are keenly waiting in this budget. I expect the prime minister may make some reference to GST on Friday," he added. -- Bernama
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