KUALA LUMPUR: It is not possible for the Malaysian government to lower tax rates and increase subsidies at the same time, said Prime Minister Mahathir Mohamad on Thursday (Oct 10) ahead of the budget speech.
"I read in the newspapers what the people want is lower taxes and an increase in subsidies, that is contrary. You can't have lower taxes and then increase in subsidies," he said.
"There must be a balance between the two. We try to lower the taxes but the government must have money.
"If you're going to subsidise, you must have money. If you lower too much, we have no money and you cannot subsidise," Dr Mahathir told reporters when asked on what to expect in Budget 2020.
It will be tabled by Finance Minister Lim Guan Eng in Parliament on Friday.
According to Bernama, a pre-budget wishlist conducted by local media found that respondents wanted lower taxes and higher subsidies especially on essential items including rice, flour, cooking oil and others.
Dr Mahathir said subsidies must be channeled to those who truly need them.
"Subsidies will be given just not outright to everybody, it must be given to deserving group of people," he said.
"Even among the B40 (bottom 40 per cent), there are people who not need subsidies. We are going into details on who should receive subsidies from the government."
This would be the Mahathir government's second budget since coming to power in a stunning election victory in May 2018.