The government is still in talks with Petroleum Nasional Bhd (Petronas) to lessen its dependence on the state oil company's contribution to the government's revenue.
Secretary-general of the Ministry of Finance Datuk Mohd Irwan Serigar Abdullah said before the contribution could be lessened further, a full revamp of the country's tax structure must be put in place.
"It (the gradual reduction in dependence on oil-related revenues) will coincide with a more firm (overall) tax structure," he told pressmen after the post-2013 Budget dialogue organised by the Malaysian Economic Association and University of Malaya's Faculty of Economics and Administration here yesterday.
He noted that the government has gradually reduced dependence on oil-related revenues, where a lower dividend of RM28 billion was imputed for 2012 from Petronas, compared with RM30 billion in 2011.
"The dividend to be paid by Petronas to the government will be further reduced by RM3 billion to RM27 billion next year," said Mohd Irwan.
Mohd Irwan said both parties have been in talks for the last two years in seeking to cut revenue from oil money.
He said less dividend payout from Petronas would mean more cash to reinvest for the oil company and the government could in turn collect more money from tax.
Asked if the plans to reduce dependence on oil-related revenue could coincide with the introduction of the Goods and Services Tax (GST), Mohd Irwan replied "maybe".
The government says it wants to introduce the GST to widen the revenue base where only about 10 per cent of the workforce pays income taxes and to cut the fuel subsidies that are among Asia's highest.
Meanwhile, chairman of Taxand Malaysia Bhd Veerinderjeet Singh said the government should strive to reduce corporate tax rate to 20 per cent from 25 per cent presently.
He said a 20 per cent corporate tax rate is the best rate to attract foreign investors as well stimulate private sector growth.
"The government should announce a plan to reduce corporate tax rate 1 per cent annually to achieve the 20 per cent tax rate," he said.
