AN OVERALL tax reform is needed to overcome declining government revenue, said the Finance Minister today.

“Tax revenue, for example, has been declining steadily from 20.9% of GDP in 2013 to 16.3% of GDP in 2017.

“This declining trend manifested despite the introduction of GST. This can only be arrested with a more holistic reform of the taxation system,” said Lim Guan Eng during the Syarikat Jaminan Pembiayaan Perniagaan Bhd (SJPP) and United Overseas Bank (UOB) MOU signing ceremony today.

He said the government was also setting up a Tax Reform Committee (TRC) to assess the Malaysian taxation system to make it more efficient, neutral and progressive.

“Other initiatives to be looked at by TRC are the minimisation of tax leakage and evasion.”

The government reported that tax revenue from the oil and gas sector was RM8.4 billion in 2017 compared to RM11.6 billion a year earlier.

The new Pakatan Harapan government has scrapped GST in the first parliament meeting following the elections. The GST will be replaced with the Sales Tax and Services Tax on Sept 1.

GST contributed RM41 billion to government revenue in 2017.

Meanwhile, Malaysian SMEs will now have access to the SJPP-UOB BizMoney programme that offers collateral-free loans of up to RM1 million.

The MOU today has doubled the current UOB programme where SJPP will guarantee up to 70% of the loans.

To date, more than 13,000 SMEs have benefitted from the various programmes offered by SJPP. The guarantee rates offered by SJPP keeps the rate down between 0.5%-1%. –  August 21, 2018.