Malaysian government announces funding boost to train accountants

5 Nov 18

The new Malaysian government has allocated 227.5m ringgit ($54.39) to increase the number of accountants in the country, in its budget last week.

It also announced tax hikes to try and combat the country’s debt, on Friday last week, as it revealed the country’s budget deficit had increased to the highest for five years.

The Malaysia Professional Accountancy Centre will get 17.5m ringgit ($4.19) over the next five years to train an additional 600 accountants. The centre hopes to increase the number of registered accountants to 3,000, from 1,555 today.

The government also announced it would allocate 210m ringgit ($50.2m) as part of its Bumiputera Empowerment Agenda, which will also increase the number of accountants. The agenda was launched under the former administration, led by Najib Razak, to “empower the economy”.

The chief executive of the Malaysian Institute of Accountants Nurmazilah Dato’ Mahzan said the funds will “further enhance the institute’s initiatives to strengthen the development of the accountancy profession, which supports economic growth”.

She also noted the government’s commitment to move to accrual-based accounting by 2021 would “drive better public financial management and good governance”. The finance minister said last month that this would happen within three years.

In the budget on Friday, the Malaysian deficit target for this year was revised to 3.7% of GDP from 2.8%, which was the target set under the previous government. This is expected to ease to 3.4% next year and 3% by 2020, finance minister Lim Guan Eng said.

The budget comes amid slowing economic growth in the country and rising global trade risks. The Malaysian economy is forecast to ease to 4.8% this year from almost 7% in 2017.

Prime minister Mahathir Mohamad got rid of a consumption tax soon after his election win six months ago, which left a hole in the country’s finances.

Lim also cut corporate tax rate to 17% from 18% for companies with a taxable income of up to 500,000 ringgit ($120,000), on Friday.

To make up for these loses, the Malaysian government announced a review of existing tax structures as well as ways to increase revenue, in the budget statement.

Lim plans to more than double the amount of dividends the government expects to receive next year from state oil company Petroliam Nasional Bhd to 54bn ringgit ($13bn).

A stamp duty on properties worth 1m ringgit or more will be raised to 4% from 3%, a sugar tax will be introduced and an airfare levy on passengers.

Gambling companies must also contribute 35% of their gross income to the government, on top of higher license fees at 150m ringgit ($36m), from 120m ($28.8m) ringgit, the budget stated.

The government also said it plans to cut public investment to make up funding shortfalls, saying the private sector would “remain a key driver of growth” in 2018 and 2019.

The government has already announced the cancellation or suspension of at least $20bn in public infrastructure projects and the government is unlikely to invest in new projects in the short-term, according to the government’s economic outlook report, released on Friday.

The new government has billions of unpaid tax refunds, inherited from the previous administration, as well as the corruption scandal where billions of ringgits went missing from a state fund, under Najib’s leadership.

The former prime minister has been charged on a number of counts of money laundering and abuse of power, in relation to the scandal.

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