Target of reducing Malaysia’s budget deficit to 5% is achievable (updated)

KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim (Picture) has pledged that the government can meet the target of reducing the country’s budget deficit to 5.0 percent of gross domestic product in 2023 and 3.2 percent in 2025.

Anwar, who is also finance minister, said there was nothing to dispute about the budget deficit reduction target given the latest developments following the presentation of the revised 2023 budget.

“When we examine post-budget developments, such as B. increased oil revenues, (payment of) 1.8 billion US dollars from the International Petroleum Investment Co (IPIC) and large investments, including from Amazon Web Services and Tesla, there should be no dispute,” he said today at the conclusion of the Debate on the 2023 Supply Bill at the Dewan Rakyat.

Anwar, Minister of Finance from 1991 to 1998 under Tun Dr. Mahathir Mohamad added: “I have been through this process for eight years before and the experience would have taught me how to reduce the deficit. That is something we can achieve.”

He said that based on the latest data he received, the country’s budget deficit has already reached the set target.

“How do we reduce it? It is through actions that we have taken and discussed. If necessary, I will make an announcement in Parliament from time to time,” he said.

Anwar said the long- and medium-term measures the government will take to strengthen the country’s tax position include the introduction of the Fiscal Responsibility Act, the luxury goods tax and a capital gains tax (on corporate disposals of unlisted shares).

However, he said the new tax enforcement mechanism is still under discussion and will not burden consumers to the extent that it is no longer competitive.

“We will ensure that the negotiations (about the tax implementation) are thorough and involve all parties and that the financiers do not see this as a burden,” he added.

Meanwhile, the prime minister also expressed the need to support entrepreneurs and businesses in Sabah and Sarawak through the 2023 budget through a special allocation to small and medium-sized enterprises (SMEs).

“The government will provide an allocation dedicated to the SME communities of Sabah and Sarawak in the form of micro-loans totaling RM 100 million through Bank Simpanan Nasional (BSN) and a guarantee facility for SME bank loans totaling RM 500 million said Anwar.- Bernama