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Free Malaysia Today
12 hours ago
- Business
- Free Malaysia Today
Expediting reforms will make tax hikes easier to swallow, govt told
World Bank's lead economist for Malaysia, Apurva Sanghi, said reducing spending would not be easy as most of it involved 'rigid' costs such as wages, pensions and debt service. PETALING JAYA : The World Bank's lead economist for Malaysia, Apurva Sanghi, says expediting reforms – such as enacting a government procurement law – will make the public less hostile towards tax hikes. In a post on X on the expansion of the sales and service tax, Apurva pointed out that the auditor-general regularly uncovered losses in public funds, irregular payments and wastages across various ministries. While some reforms have been carried out, a specific law to oversee government procurement has been delayed, he said. Apurva said reforms would build public trust, which in turn would make it 'easier to swallow bitter tax hikes'. 'Tax hikes are painful but people can bear them, if they're meaningful. 'This means faster progress, especially on governance reforms and that would increase trust.' Apurva said trust was the ultimate currency for any government. On comparisons made between the SST and the goods and services tax, Apurva said that while both were regressive, it could be made progressive via targeted cash transfers and exemptions. 'The current SST expansion does include progressive elements.' On June 9, the finance ministry announced that a 5% to 10% rate would be imposed on non-essential goods from July 1, although basic necessities would not be taxed. The announcement has triggered brickbats. Apurva also responded to those questioning the government's decision to raise taxes instead of reducing spending. He said while it was a fair question, the country needed to spend more, which meant it needed to raise more revenue. The finance ministry previously said that the SST collection is expected to increase by RM5 billion in 2025 and by RM10 billion in 2026, following the expansion of its scope. Apurva noted that both revenue and spending had dropped by 30% since 2012, which was well below those of global peers. 'Spending needs are only growing, especially as Malaysia ages,' he said, adding that reducing spending would not be easy as most of it involved 'rigid' costs such as wages, pensions and debt service which accounted for 57% of operation expenditure.
New Straits Times
26-04-2025
- Business
- New Straits Times
World Bank sees Malaysia's 2025 GDP growth at 3.9pct
KUALA LUMPUR: The World Bank has projected Malaysia's gross domestic product (GDP) growth rate for this year at 3.9 per cent, citing global challenges. In a post on his X account (@ApurvaSanghi), the World Bank's Lead Economist for Malaysia, Dr Apurva Sanghi, wrote: "With all possible caveats, we (the World Bank) project Malaysia's 2025 growth rate at 3.9 per cent." With all possible caveats, we (World Bank) project Malaysia's 2025 growth rate at 3.9% And nominal GDP pc at US$ 11,867 or ~RM 52,400 Watch this space for more End/ — Apurva Sanghi (@ApurvaSanghi) April 24, 2025 The World Bank has also revealed growth projections for other Asean countries, with Vietnam expected to lead at 5.8 per cent, followed by Indonesia at 4.7 per cent, the Philippines at 5.3 per cent, Cambodia at 4 per cent, and Thailand at 1.6 per cent. Additionally, China's projected growth rate is 4 per cent. Yesterday (April 24), Bank Negara Malaysia Governor Datuk Seri Abdul Rasheed Ghaffour said Malaysia's GDP growth forecast for 2025, currently projected between 4.5 per cent and 5.5 per cent, may need to be revised downward due to the impact of tariffs. However, Abdul Rasheed added that the central bank is not rushing to adjust the forecast, as the situation is still evolving. A day earlier, the IMF downgraded Malaysia's real GDP growth forecast for 2025 to 4.1 per cent, down from 4.7 per cent, reflecting a broader downward revision across the region.
