Finance Ministry looking at options to raise revenue, reduce leakage

PARLIAMENT | The Finance Ministry is looking at the options available in a bid to increase the country’s revenue and reduce leakage.

Deputy Finance Minister II Mohd Shahar Abdullah said it recently formed a multi-agency task force to look at the leakage arising from the sale of illicit cigarettes and liquor.

“The government will table in Budget 2021 the findings and actions to be taken to reduce leakage,” he said in reply to a question from Dr Lee Boon Chye (Harapan-Gopeng) at the Dewan Rakyat today.

Lee had asked whether the government would consider imposing a windfall tax for industries that have made extraordinary profits amid the Covid-19 pandemic such as glove manufacturing.

“The government has not made a decision on whether it will impose the windfall tax in order to boost the nation’s revenue, but the government has a broad-based policy and whatever is good from the previous government will be continued,” he added.

On a question on the current economic condition from Mohamad Sabu (Harapan-Kota Raja), Shahar said foreign investors are becoming increasingly confident of the administration following its success in curbing the spread of the Covid-19 pandemic and its ability to safeguard the well-being of people affected by the outbreak, as well as to stimulate economic growth through the Prihatin and Penjana stimulus packages.

He said in the post-GE14 period from May 9, 2018 to Feb 29 this year, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 19.7 percent to 1,482.64 on Feb 28 from 1,846.51 on May 8, 2018.

In the same period, market capitalisation dropped 15.1 percent to RM1.5 trillion on Feb 28 versus RM1.87 trillion on May 8, 2018, he noted.

Under the current administration, the FBM KLCI strengthened 5.5 percent to 1,564.59 on Aug 14 this year from March 1, he added. 

Shahar said market capitalisation, meanwhile, rose 5.0 percent to RM1.67 trillion on Aug 14 from RM1.59 trillion on Feb 28.

“On March 9, more than a year after GE14, and due to the impact of Covid-19 as well as tumbling crude oil prices, the FBM KLCI plunged to 1,219.72, its lowest level in 11 years.

“However, the success of the present government in handling the Covid-19 impact in a holistic and effective way such as through the Prihatin and Penjana packages has boosted investor confidence, with the FBM KLCI recovering to 1,611.42 on July 29,” he added.

Bursa Malaysia, he said, has been one of the best-performing stock exchanges in the Asean region, noting that the factors that build investor confidence include certainty of the nation’s revenue, market performance, economic growth and political stability.

- Bernama