May 31, 2018 / 8:49 AM / 6 months ago

Malaysia finmin: scrapping GST will create $5 billion hole in budget

KUALA LUMPUR (Reuters) - Malaysia’s finance minister said on Thursday that a promised withdrawal of a goods and services tax would create a 21 billion ringgit ($5.3 billion) hole in the budget, which will be mostly plugged by increased oil-related revenues and spending cuts on projects.

Lee Guan Eng said the scrapping of the tax on June 1 can be offset by 5.4 billion ringgit of oil-related revenues and cuts on non-essential projects amounting to 10 billion ringgit.

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

Reporting by A.Ananthalakshmi; Writing by John Geddie; Editing by Jacqueline Wong

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