Tengku Zafrul: Malaysia did not hesitate to expand fiscal position for economic recovery

Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz said even though it was Malaysia's biggest ever budget, it was thought through with a clear strategy for fiscal consolidation to, among others, achieve a deficit of below four per cent under the government's Medium-Term Fiscal Framework.

"The government is also working on the Fiscal Responsibility Act to institutionalise fiscal prudence, governance and transparency based on global best practices.

"The government is also committed to strengthening its revenue base through a multi-prong strategy, beginning with regulating the shadow economy, which is estimated to be roughly 18 per cent of Malaysia's gross domestic product (GDP) or approximately RM300 billion in 2019," he said in his speech at the 13th Annual CGS-CIMB Malaysia Virtual Corporate Day 2021.

Additionally, Tengku Zafrul said the government is also executing its medium-term revenue strategy, which among others, will reduce the country's dependency on commodities and further enhance the tax framework to reduce leakages.

"I assure you, however, that any review will ensure a tax regime that is equitable to all, appropriately-timed and takes into consideration its impact on the people and businesses."

The finance minister added that the proper execution of Malaysia's large-scale projects will drive socio-economic growth in the coming years.

"These include those under Budget 2021 such as the RM7.4 billion JENDELA, the national digital infrastructure plan, with the first phase targeting 7.5 million premises with gigabit speed fixed-line broadband, and 96.8 per cent 4G mobile coverage with better mobile broadband speed," he said.

The other infrastructure projects include the Pan-Borneo Highway, Gemas-Johor Bahru Electrified Double Tracking, Klang Valley Double Tracking, Mass Rapid Transit 3, and the Johor Bahru-Singapore Rapid Transit Syatem.

"This year alone, the government has allocated RM15 billion for these projects, (which are) expected to provide high multiplier effects from the construction phase all the way beyond the projects' completion," he said.

Apart from that, there are infrastructure projects to reduce the urban and rural development gap, for which RM2.7 billion has been earmarked, as well as the five main economic corridors that will also receive a fiscal boost to facilitate investments and growth.

Tengku Zafrul also said that after the turmoil in 2020 due to the COVID-19 pandemic, Malaysia has emerged from this crisis and 2021 will be a year of transition.

"There has been challenges across all economies, to manage national resources prudently, while also balancing current and future needs.

"As difficult as it may be, any decision must be for the benefit of the Malaysian people and the business community," he said.