Source: MoF

KUALA LUMPUR, Oct 11 -- The consolidated public sector's (CPS) financial position is anticipated to record a lower current surplus of RM42.2 billion in 2019, due to the allocation for outstanding tax refunds, said the Ministry of Finance (MOF).

In its 2020 Fiscal Outlook and Federal Government Revenue Estimates Report, the MoF said the public sector's consolidated development expenditure is expected to decline by 2.8 per cent to RM138 billion this year, mainly due to lower development expenditure by the Federal Government.

“Hence, the CPS' overall deficit -- after netting off all intra-transactions between units -- is projected to be higher at RM95.8 billion or 6.3 per cent of gross domestic product (GDP) in 2019 (2018: RM66 billion, 4.6 per cent),” it said.

Meanwhile, state governments’ total consolidated revenue is projected to increase significantly by 19.6 per cent to RM27.9 billion in 2019, largely driven by state-generated revenues, followed by tax revenues, non-tax revenues and non-revenue receipts.

“Of the total, 88.1 per cent or RM24.6 billion is from state-generated revenue which largely consists of sales tax, petroleum royalty, investment income, land premium and land tax, as well as Federal Government grants,” it said.

State-generated revenue is expected to surge by 30.8 per cent, mainly due to the Sarawak state government's move to impose a five per cent tax on the sales of its petroleum products from Jan 1, 2019.

Sarawak, Sabah, Terengganu, Selangor and Johor continue to be major contributors to the total consolidated state-generated revenue.

The MOF said tax revenue for 2019 is estimated to be at RM9 billion, accounting for 32.1 per cent of total consolidated revenue.

Of the RM9 billion, RM3.2 billion are revenues from direct tax, mainly comprising taxes on natural resources such as land, forestry and mines, while indirect tax is expected to contribute RM5.8 billion. 

Meanwhile, non-tax revenue is expected to be at RM12.5 billion, or 44.7 per cent of total consolidated revenue, mainly comprising petroleum royalty (RM3.6 billion), investment income (RM3.4 billion) and land premium (RM2.1 billion), it said.

On non-revenue receipts of RM6.5 billion, the MoF said it mainly consists of Federal Government grants, which include capitation grants based on annual population projection, grants for department operating expenditures and service charges for the involvement of state employees in federal development projects.  

“Overall, the state governments’ consolidated financial position in 2019 is anticipated to record a current surplus of RM13.6 billion, representing 48.6 per cent of total consolidated revenue,” the ministry said, adding that the state governments’ overall balance -- after taking into account development expenditures -- is expected to register a surplus of RM674 million or 0.04 per cent of the GDP.

This year, consolidated general government revenue is estimated to increase by 11.3 per cent to RM312.7 billion, while consolidated operating expenditure is expected to increase by 13.5 per cent to RM301.5 billion -- both largely attributed to the Federal Government, leading to a lower current surplus of RM11.2 billion when compared with 2018.    

Additionally, consolidated development expenditure is projected to decline by 6.5 per cent to RM59.1 billion mainly due to lower Federal Government development expenditure.

Hence, the general government’s overall deficit is expected to be at RM48 billion or 3.2 per cent of GDP this year, after netting off all intra-transfers and net lending, the ministry said.

On the financial position of non-financial public corporations (NFPCs), the MoF said the NFPCs are expected to register a lower current surplus of RM31.1 billion in 2019 -- compared with RM60.7 billion in 2018 -- due to higher outflows, particularly the one-off special dividend from Petronas to the Federal Government.

“Thus, NFPCs' overall deficit for the year is estimated at RM47.8 billion, while their total consolidated revenue is expected to decrease by 0.6 per cent to RM385.8 billion due to lower global crude oil prices.

"Total expenditure is estimated to be at RM433.6 billion, and the current expenditure is expected to increase by 8.3 per cent to RM354.6 billion following the completion of major projects, including the Pengerang Integrated Complex," said the MoF, adding that NFPCs will continue to invest in domestic and overseas projects in order to upgrade and modernise their infrastructure, as well as to drive a more sustainable business growth.

-- BERNAMA