International tax & business 2017

Low oil price shock in Malaysia: Government fiscal impact and petroleum industry reactions

Source: Australian Tax Forum Journal Article

Published Date: 1 Dec 2017

 

The current shock of low oil prices as a disruptor to government tax revenue and petroleum industry activity is a concern within the Asia-Pacific region. In the case of Malaysia, the government is heavily dependent on petroleum revenues, which is the reason for this parallel evaluation of government fiscal impact and industry reactions to the slide in world oil prices. The research draws data from publicly available information as well as recent expert interviews. Findings show that low oil prices have impacted the Malaysian Government petroleum-related revenue, resulting in Budget revisions in 2015 and 2016. Malaysia's new goods and services tax has, however, partly offset lower petroleum revenues. From the petroleum industry perspective, low oil prices are having structural impacts, although reactions have differed to secure cash flows depending on whether an entity is extractive, service or refining orientated. This interdisciplinary research is significant for its up-to-date analysis of changes in government tax policy and the petroleum industry activities. It makes a contribution to understanding government revenue consequences and effects on industry of low oil prices on an ASEAN country that is an export competitor to Australia. It has useful insights for Australia's 2017 review of petroleum taxation.

Author Profile
Lydia Thiagarajah

Author Profile
Jeyapalan Kasipillai

Author Profile
Dr Diane Kraal

Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now

Already a Subscriber? Login now

Details

The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))

("TTI")

The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.

Tags

International tax & business 2017

Share this page