How does the government plan to address the RM21 billion revenue shortfall from GST abolition?

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Government Strategies to Offset GST Revenue Shortfall

The government plans to address the RM21 billion revenue shortfall resulting from the abolition of the Goods and Services Tax (GST) through a combination of increased revenue streams and reduced expenditure. These measures are expected to help the government meet its projected budget deficit of 2.8 per cent of the GDP for the current year.
Increased Revenue from Oil and GLC Dividends

A portion of the RM21 billion revenue gap will be covered by anticipated higher oil revenues. Additionally, the government expects to receive increased dividend payouts from government-linked corporations (GLCs). These contributions are projected to bolster government coffers and offset some of the lost GST revenue.
Reintroduction of Sales and Services Tax (SST)

To further mitigate the revenue shortfall, the government plans to reintroduce the Sales and Services Tax (SST). This move is intended to replace the revenue previously generated by the GST, thereby narrowing the fiscal gap. The Finance Ministry is expected to release a detailed list of taxable industries and items to assist businesses in preparing for the SST's implementation.
Reduction in Infrastructure Project Spending

The government also intends to partially close the RM21 billion revenue shortfall by cutting spending on major infrastructure projects. This strategy involves reviewing and suspending or delaying large-scale projects, a move that economists suggest bodes well for long-term economic growth and macro stability, despite potential short-term negative sentiment in financial markets.

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How does the government plan to address the RM21 billion revenue shortfall from GST abolition?

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