The Finance Ministry revealed that Malaysia’s total debts amounted to RM1.087 trillion, which is 80.3% of the country’s gross domestic product (GDP) as at the end of last year.
This was revealed after the official debt, contingent liabilities and lease payments for the public-private partnerships were calculated.
The ministry stated official debt amounted to RM686.8 billion (50.8% of GDP), while government guarantees for various entities that were unable to pay their debts was at RM199.1 billion (14.6% of GDP).
Such government guarantees for entities that were struggling to pay their debt, were for entities such as Danainfra Nasional Bhd (RM42.2bil), Govco Holdings Bhd (RM8.8bil), Prasarana Malaysia Bhd (RM26.6bil) and Malaysia Rail Link Sdn Bhd (RM14.5bil), as well as an estimated RM38bil for 1Malaysia Development Bhd (1MDB).
Furthermore, commitments to pay lease payments through public private partnerships were at RM201.4billion (14.95 of GDP).
Finance Minister Lim Guan Eng, in a statement, said transparency of debt would allow recognition of the country’s true debt situation and allow the federal government to take proper action in a bid to strengthen the nation’s financial standing.
“Malaysians are rightly concerned with our debt situation, as we were when we were in the opposition.
“We would like to explain that the new government will carry out its administration based on the principles of competency, accountability and transparency (CAT). We want to establish the true baseline on the state of financial affairs, diagnose the problems and then prescribe all necessary remedies,” he said.
Based on the official debt of RM686.8 billion and the guarantees for companies that cannot repay their debt, the federal government debt would amount to RM885.9 billion, which is 65.4% of GDP.
Lim said the federal government is committed and obligated to make lease payments (including rental, maintenance and other charges) for a list of ‘public private partnership’ projects including construction of schools, hostels and roads, among others.
He further stressed that the fundamentals of the economy remained strong and that the financial sector was stable, while the banking sector was well-capitalised.
Meanwhile, former Prime Minister Datuk Seri Najib Tun Razak had released a statement critising the governments move to announce the RM1trilllion government debt, as it would unsettle financial markets and affect investors’ confidence and credit rating agencies.
The newly-launched government initiative, Tabung Harapan, collected a whooping RM7.08 million within 24 hours after it launched.
The fund, which relies on the generosity of Malaysians, was launched in a bid to combat the government’s national debt of RM1 trillion.
Finance Minister Lim Guan Eng said the ministry was humbled by the kindness of Malaysians who have been channelling funds to Tabung Harapan, which was set up after Malaysians expressed they wanted to contribute to the country’s debt issue.
He had compared the effort to the late 1990s where South Koreans donated their gold items to settle their debts during the Asian financial crisis.
However, scammers have taken advantage of the fund, as several posters with a fake account number have circulated on social media. The official account number for the trust fund is 5660 1062 6452 and donations can only be made in ringgit.
It is advised you double check the account number and name before making a donation. Contributors are also advised to keep their receipts as the donations will be exempted from tax.
The ministry will update the donation figures on their website and social media platforms.
The Goods and Services Tax (GST) will be set at 0% effective June 1, 2018.
The Finance Ministry, in a statement on Wednesday, announced the current rate of 6% will be scrapped and the new adjustment will be implemented nationwide next month to goods and services in Malaysia and those imported from overseas.
However, this does not include goods and services listed in the Goods and Services Tax (Exempt Supply) Order 2014, which have already been exempted from GST.
“As such, all registered business entities have to comply with the GST rate adjustment to 0%. In the meantime, all registered businesses are still subject to all existing rules including those related to tax invoice, submission of tax return within predetermined taxable period, and claims of input tax credit.
“Businesses also have to ensure that prices of goods and services are in compliance to Price Control and Anti-Profiteering Act 2011 at all time,” said the ministry.
sumber:https://www.imoney.my/articles/government-debt-trillion
https://www.imoney.my/articles/tabung-harapan-debt
https://www.imoney.my/articles/gst-malaysia
