The 2019 Budget will be a difficult one for the federal government, said Finance Minister Lim Guan Eng.

The budget, the first under the Pakatan Harapan government, is scheduled for tabling in Parliament on Nov 2.

“We must fix our fiscal finances while improving the well-being of the rakyat. We hope the people will understand that it will take us three years to do so,” he said during an interview on Bernama News here tonight.

Earlier, during an interview on Bernama News Channel’s (BNC) “Ruang Bicara” programme, Lim said the government expected positive developments toward reducing the country's debts in three years, despite lower collection from tax revenue.

Under the sales and services tax (SST), the government expects to collect RM21 billion next year, as opposed to RM44 billion under the goods and services tax.

"With the improved SST implementation, the government has 'returned' a tax collection of about RM23 billion to the people," he added.

Meanwhile, Lim said the outcome of the review of the list of goods under the SST is expected to be announced before the tabling of the 2019 Budget.

He said the government had received a lot of feedback from the people to review the tax rate and reduce it for several necessities including cosmetics, camera and retreaded tyres.

 “The feedback from the female community said that cosmetics are important and needed. We respect (this) and will reduce (tax rate) to five per cent (from 10 percent).

“If it (tax rate reduction) can guarantee the economic well-being of the people, we will implement,” he said to Bernama.

Lim also said that since the SST was reintroduced, the prices of most products were lower by 0.2 percent compared with the prices under the GST regime.

“In the event of a price increase, it (difference in increase) is much lower compared with GST because previously, many goods were subject to the GST, however, now not anymore, such as motorcycles below 250cc, baby diapers and sanitary pads,” he added.

--Bernama