PUTRAJAYA: There is more good news for the economy. Revenues have increased while the fiscal deficit in 2011 eased to 5% of GDP, compared with 5.6% in 2010.

The news comes a day after the announcement that Malaysia achieved 5.1% gross domestic product expansion for 2011 despite the challenging external environment.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the reduced deficit exceeded the Government's expectations of bringing it down to 5.4% as stated in Budget 2011.

Ahmad Husni said the reduced deficit followed stronger financials of the Federal Government.

“Revenue rose 16.1% to RM185.4bil in 2011 compared with RM159.7bil in the previous year,” he said in a statement yesterday.

Minister in the Prime Minister's Department Datuk Seri Idris Jala, when contacted, said the increase in revenue meant that the Government was able to continue its programmes to help the rakyat.previous year, he said in a a statement yesterday.

“The rise in revenue came with a 29.4% increase in tax collection by the Inland Revenue Board. It collected RM102.2bil last year compared to RM79bil in 2010,” said Ahmad Husni.

He added that the amount was also the highest collection recorded by the board.

Indirect taxes collected by the Customs Department also increased by 7% to RM32.6bil from RM30.5bil, while non-tax revenue rose 0.8% to RM50.5bil from RM50.1bil in 2010.

Minister in the Prime Minister's Department Datuk Seri Idris Jala said the increase in revenue meant that the Government was able to continue its programmes to help the rakyat.

“Under the NKRA on rural infrastructure for instance, the Government can build more rural roads. This programme will continue this year and beyond,” he said, adding that the Government was able to acquire 38 new KTM trains to improve urban public transport.

“The improved fiscal position means that the Government is in a solid position to fulfil its part of the investment requirements under the Economic Transformation Programme (ETP).

“It demonstrates that we are on the right track in transforming our economy into a high-income nation by 2020,” he said.

Ahmad Husni said the encouraging economic growth was driven by high activities in the domestic economy, particularly in investment expenditure and private consumption.

“The rise in revenue came with a 29.4% increase in tax collection by the Inland Revenue Board. It collected RM102.2bil last year compared with RM79bil in 2010,” he said.

He added that the amount was also the highest collection recorded by the board.

Indirect taxes collected by the Customs Department also increased by 7% to RM32.6bil from RM30.5bil, while non-tax revenue rose by 0.8% to RM50.5bil from RM50.1bil in 2010.

“The Government is confident that the country's financial position will continue to strengthen with the implementation of several measures under the Strategic Reform Initiatives (SRI), especially through agencies such as the IRB and Customs,” he said.

On Wednesday, Bank Negara said the full-year growth came in at 5.1% after expanding 7.2% in 2010, as domestic conditions remained favourable, supported by both private and public sector spending.

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