The Malaysian Insight

PAKATAN HARAPAN’S alternative budget, which aims to end highway tolls, abolish goods and services tax (GST) and bring back fuel subsidise, could be unrealistic, said Malay Economic Action Council (MTEM).

Its chief executive officer Ahmad Yazid Othman, however, said the Malay business lobby group welcomed the unveiling of the budget, as it focused on five main agendas including wages, employment and progressive taxation policies. 

Ahmad Yazid said among things the council supported were the increase in minimum wage rate, higher tax rate on the richest 10% and reduction of migrant labourers in the manufacturing, services and construction sectors.

“PH’s budget gives hope to the people but its implementation needs to be looked at.

“The plan is to save RM20 billion through cutting of wastage and corruption. It’s difficult to implement as eliminating corruption requires high administrative costs and the savings are not identified,” he said. 

On Wednesday, PH proposed a budget of RM258.52 billion for 2018, less than the RM260.80 billion in the ruling BN budget.

It also proposed raising the minimum wage rate to RM1,500 and providing free education at public universities.

About 23% of the proposed budget is being allocated to development while 77% is for operating costs. In comparison, BN sets aside 20% for development and 80% for operating expenditure.

PH’s proposed budget projects a deficit to gross domestic product of 2%, lower than the 3% in BN’s Budget 2017.

In terms of revenue, PH expects to collect less taxes from individuals but more from companies in 2018. PH will collect RM32.79 billion while BN is projected to collect RM35.88 billion in personal income tax.

However, PH estimates it will collect RM85.96 billion in taxes from firms compared with BN’s RM83.15 billion.

PH believes the higher collection in corporate tax would be one of the results of a consumption boom after GST is eliminated. – October 27, 2017.