PUTRAJAYA: The government’s ongoing fiscal policies are good enough to spearhead Malaysia into an advanced nation by 2020 without making big changes to the tax regime.
Chief Secretary to the Government, Tan Sri Dr Ali Hamsa said this in response to the Organisation for Economic Co-operation and Development (OECD)’s recommendations of gradually reducing the exemptions and then raising the goods and services tax (GST) over the long-term in order to raise the country’s tax revenue.
“As far as we are concerned, measures that we have undertaken for fiscal consolidation to achieve the target of making more balanced by 2020 is achievable, without looking at the area of increasing more tax or the GST,” said Ali.
“I also want to reiterate that just like what was said by Prime Minister Datuk Seri Najib Razak, there will be no increase of the GST in 2017,” he stated.
Ali had earlier said that he is pleased with the findings of the OECD Economic Survey: Malaysia 2016, which he himself had launched alongside OECD’s deputy secretary-general, Rintaro Tamaki.
The results of the findings highlighted some areas that the country is doing well at and of areas that needed to be enhanced which includes
1) To continue fiscal consolidation as a buffer should economic conditions deteriorate,
2) To follow through with the revised school curricula based on international benchmarking and improved teacher evaluation, training and upscaling,
3) Pursue further investments liberalisation to boost services sector growth and competition, and
4) Commission an independent review of public sector productivity, among others.
“We acknowledge and welcome suggestions by the OECD team on the areas that needs to be intensified such as enhancing innovation, improving productivity, engaging more skilled workers, encouraging fair competition and reducing the cost of business,” said Ali.
“The recommendations provided would serve as valuable inputs for the formulation of strategic policies aimed at strengthening Malaysia’s macroeconomics’ fundamentals to withstand periods of intensified global uncertainties going forward.”
The OECD Reviews on Innovation Policy: Malaysia 2016 was also launched at the same event, highlighted the current level of innovation capabilities, research and development and related policies in Malaysia.
Both reports are now available on the OECD website.