MoF: Scrapping GST will create RM21 billion hole in budget

(Reuters) – Malaysia’s finance minister said today that a promised withdrawal of a Goods and Services Tax (GST) would create a RM21 billion hole in the budget, which will be mostly plugged by increased oil-related revenues and spending cuts on projects.

Lim Guan Eng said the scrapping of the tax on June 1 can be offset by RM5.4 billion of oil-related revenues and cuts on non-essential projects amounting to RM10 billion.

He said a new sales tax would likely be introduced on September 1, and that the government would meet its projected budget deficit of 2.8 per cent for 2018.