Guan Eng assures no undue spendings amid economic uncertainties

Amid expected challenging economic conditions next year, Finance Minister Lim Guan Eng has given his assurance that there will be no undue use of funds allocated under Budget 2020.

Lim (photo) made the remarks at the end of a Budget 2020 question and answer session in Kuala Lumpur today when pressed to reassure investors that contingency funds set aside by the government will not be used for populist measures.

"Rest assured there will be no undue utilisation of our resources unless it is for strategic national interest," said Lim to questions from session moderator Wong Sue Wan.

Wong had pointed out that not only is Malaysia expected to face a challenging economic landscape next year, there were also uncertainties sparked by rumours of possible power transitions for the prime minister's post.

"How do we know and how will investors in this room know that the contingency fund will be not used for populist measures if ever there was a change in the captain of the ship?

"And how are we to be certain you are not going to raid from Petronas coffers again?

What is the assurance that you will be disciplined?," she said.

Lim said he objected to Wong's use of the word "raid" and reiterated how the

one-off RM30 billion special dividend received from Petronas last year was used to pay back refunds from the goods and services tax (GST) which should have been returned to businesses.

He further downplayed concerns raised surrounding the transition of power between Prime Minister Dr Mahathir Mohamad and PKR president Anwar Ibrahim, pointing out that the two individuals so far remained satisfied with the plan.

"We have, on one hand, the prime minister saying that when the time comes he will pass on the baton. And on the other hand, we have Anwar who said he is happy with the time frame set by the prime minister.

"So if both parties are satisfied, then why are the rest dissatisfied?" said Lim.

'World Bank proposed higher super-rich tax'

Meanwhile, Lim also revealed that the new income tax band of 30 percent for

individuals who earn RM2 million annually was based on a World Bank proposal which noted that Malaysia’s tax band for the wealthy was too low.

"Even with that amount, we are still too low compared to other countries," Lim said, adding that the World Bank had recommended a rate of 35 percent but the government believed such an increase would be too harsh.

At the current rate, Lim said the government expects to raise some RM100 million from the new tax band, which is a two percent increase from the previous 28 percent tax band.

He also reiterated that the government has no plans to introduce an inheritance or wealth tax in the immediate future.

The half-day panel session is jointly organised by Malayan Banking Berhad, CGS-CIMB Securities Sdn Bhd and RHB Banking Group. - Mkini