A DRASTIC drop of RM11.5 billion (22.3%) in non-tax revenue contributed to a decline in the government’s income from RM219.1 billion to RM212.4 billion for the 2016 financial year, according to the Auditor-General’s Report released today.

The report attributed the shortfall to a 34.5% drop in returns from interest and investments (RM21.4 billion), lower petroleum royalties (28.8%) and lower tax revenue from petroleum (27.1%).

Petroleum royalties earned RM3.66 billion in 2016 compared to RM5.1 billion the previous year, while tax revenue from the oil and gas sector was RM8.4 billion in 2016 compared to RM11.6 billion a year previously.

According to Auditor-General Dr Madinah Mohamad, the decline in oil revenues was caused by the overall decline in oil prices, while the lower income from investments was caused by lower dividends from government-linked companies (GLCs).

On the flip side, government income from Goods & Services Tax rose RM14.2 billion to RM41.2 billion, while income from individual taxes increased by 4.7% at RM27.6 billion.

Income from local GST goods showed the highest jump at 85% from RM14 billion in 2015 to RM25.97 billion. GST on imported goods recorded a 17.4% jump from RM12.9 billion to RM15.2 billion.

According to Madinah, the increase in GST income was due to improved collection and a larger number of companies registered to pay the tax.

“Better enforcement by the Royal Malaysian Customs also resulted in higher GST collection,” the AG’s report noted.

Malaysia continued to record a lower fiscal deficit of 3.12% in 2016, down from 4.47% in 2012. – July 31, 2017.