KUALA LUMPUR: The Ministry of Finance (MOF) is confident of hitting a balanced Budget between now to 2020, despite the foreseeable economic headwinds.
Speaking to reporters at the 7th Muslim WorldBiz, Second Finance Minister Datuk Johari Abdul Ghani said this is achievable but sacrifices have to be made along the way.
"I am confident that we will achieve a balanced Budget between now and 2020, despite economic headwinds," said Johari.
"We will however have to sacrifice a lot of things as we need to ensure that each ringgit that the government spends will have to be beneficial to the rakyat, with no wastage. It is imperative that we practise this, as failing to do so will further increase our budget deficit."
As before, Johari maintained that there will be no changes to the current Goods and Services Tax (GST) percentage rate which currently stands at six per cent.
"In comparison with other Asean countries, our percentage at six per cent is still the lowest and we also have a lot of items on our zero-rated items list," said Johari.
"If we were to combine the net effect of both GST rated and the zero-rated, effectively our GST is about 3.6 per cent as we have dropped about RM16 billion to RM17 billion of these items that are on the zero-rated list, such as medical and education-relates ones."
Johari said that numerous industries and non governmental organisations (NGOs) have requested to consider an expansion of the zero-rated list.
"Some industries and NGOs have asked us to add more items into the zero-rated list but when MOF studied the matter, we found that these items which were requested for were mostly used - between 80 to 90 per cent - by industries and not end-consumers," he said.
"This is not good because when we consider an expansion on the zero-rated items list, it is for the consumer and not industries. At the end of the day, industries can claim back the GST through input tax whereas individuals cannot."
The tabling of the 2017 Budget by Prime Minister Datuk Seri Najib Razak is scheduled for this Friday.
It is expected to continue to focus on its four core segments which are cost of living, healthcare, education and housing.