Posted on 23 October 2013 - 05:40am
Liew Jia Teng
KUALA LUMPUR (Oct 23, 2013): The government will make sure the introductory rate of goods and services tax (GST) is reasonable, and various measures will be taken to compensate the people, should the new tax system be implemented, said Minister in Prime Minister's Department Datuk Seri Abdul Wahid Omar (pix).
"We will make sure the people won't be unnecessary affected, as essential food items should be exempted or zero rated.
From the savings (from subsidy rationalisation), the actual income that we got will be partly used to support the income of people in general," he said at a panel discussion titled "Focus Asia: The Promise and the Challenge" moderated by Susan Li, Bloomberg TV Hong Kong at World Capital Markets Symposium here yesterday.
The upcoming Budget 2014, Wahid said, must be one of the most anticipated national budgets in recent years, as the economists have started calling for the implementation of GST.
"I do hope that after the budget announcement, the rating agency (Fitch Ratings) will change our credit rating to 'stable outlook'," he said.
On the Auditor-General's report on the mismanagement in some government departments, Wahid said the government is taking this issue seriously.
"We've set up a committee chaired by the chief secretary of government, and the (committee) members include director general of public service department as well as the Malaysian Anti-Corruption Commission," he said.
"These are the areas where we can improve our efficiency," he added.
Meanwhile, Wahid said the sustainability of extracting national resources, swelling of international reserves and sound banking system, are the three main reasons why people should invest in Malaysia.
"The way we manage our trade surplus, current account surplus and balance of payment have been very responsible."
Since the last Asian financial crisis, he said, Malaysia's international reserves has grown from US$30 billion in 1999 to US$136.6 billion as at Oct 14, 2013. This is sufficient to support import activities for the next 9.7 months.
Secondly, the local banking system is solid and local banks are well capitalised with good asset quality.
"We do face some challenges in terms of household debts but the central bank has come out with tightening measures to address this issue," Wahid said.
"(Thirdly,) we've been fortunate to be in the region with rich resources such as oil and gas, but more importantly is the sustainability when we extract and produce these resources," he said.
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