SINGAPORE -- Southeast Asian governments are struggling to balance their national budgets as tax revenues fall amid declining crude oil prices, even as they boost spending to prop up their slowing economies.
Malaysia will likely collect 31.7 billion ringgit ($7.21 billion) in tax revenue and dividends from state-owned oil company Petronas and other firms involved in natural resources, according to fiscal 2016's draft budget. The amount is less than half what was received in fiscal 2014. The companies contributed to 40% of the tax receipts for the oil-producing nation in fiscal 2009. Cheap crude threatens to cut the share down to 14% for fiscal 2016.
Malaysia is stepping up subsidies to low-income people and plans to increase spending 2.5% in fiscal 2016 from the previous year. The government thought it would make up the difference with the goods and services tax implemented in April, but consumer sentiment indicators have fallen to record lows. Many observers believe revenue estimates are too optimistic.
Indonesia is experiencing a revenue shortfall. Tax receipts through early November came to less than 60% of the 1.294 quadrillion rupiah ($94.1 billion) projected for the entire fiscal year ending in December. Taxes associated with consumption and investment have dropped amid an economic slowdown stemming from declining commodity prices.
The country will have to rely on overseas borrowing to cover the deficit, according to Finance Minister Bambang Brodjonegoro. Indonesia has been running both current-account and fiscal deficits, and the administration of President Joko Widodo has tried to get the fiscal house in order by scrapping gasoline subsidies. But the economy shows no sign of recovering, and the government will likely face another tough budget balancing act in fiscal 2016.
Thailand's tax revenues for the fiscal year ended in September came to 2.21 trillion baht ($61.5 billion), about 5% shy of the estimate. The nation took in less corporate taxes and taxes from oil companies as the economy stalled.
Bangkok rolled out stimulus measures aimed at propping up small and midsize companies and people in the low-income bracket, which will result in a budget deficit again in fiscal 2016. Thai leaders seek to hasten spending at the government level and at state-run enterprises to put the economy back on its feet, which would boost tax revenue. However, perpetually anemic exports are clouding prospects.
In the Philippines, the government also faces an uncertain economic future, which threatens to worsen the country's fiscal conditions.
Southeast Asian countries took on ballooning debts as they ramped up stimulus spending in the wake of 2008's global economic crisis. Those nations sought to erase the red ink with higher tax revenues fueled by economic growth, but the current slowdowns have put those plans into question.