KUALA LUMPUR, July 18 — The government constantly monitors debt service charges (DSC) expenditures and revenue collection performance to ensure the DSC-to-revenue ratio does not exceed 15 per cent, said the Finance Ministry (MoF).
In a written response published on the Parliament’s website today, it said the government has implemented measures to increase revenue collection and rationalise expenditures.
Among the measures are raising the Sales and Services Tax rate from six per cent to eight per cent and implementing targeted diesel subsidies in 2024.
“The government is implementing several strategies to ensure the DSC remains manageable and can be reduced. These include continuing gradual fiscal consolidation and prioritising local capital market sources for annual deficit financing.
“Additionally, the government is adopting strategies to broaden the revenue base, ensure sustainable revenue collection, and ensure that government borrowing is solely for financing development expenditures,” MoF said.
It was responding to Paya Besar MP Datuk Mohd Shahar Abdullah's query on the government’s strategy to keep the DSC below 15 per cent of total government revenue.
The government is also reviewing the implementation methods and financing methods of mega projects, as well as setting a ceiling limit on government guarantees through the Public Finance and Fiscal Responsibility Act 2023.
MoF added that implementing the Act is expected to improve debt sustainability, supported by the implementation of the Medium-Term Revenue Strategy and a more responsible review of expenditures.
— Bernama
