BANDAR SERI BEGAWAN – The Ministry of Finance and Economy (MoFE) is conducting a study on raising the dividends of Employees Trust Fund (TAP) and Supplemental Contributory Pension (SCP) after its second minister acknowledged that the current rates are insufficient to support retirees.
During the 16th Legislative Council session, YB Dato Seri Setia Dr Hj Mohd Amin Liew Abdullah said the compulsory five percent TAP and 3.5 percent SCP contributions are not enough and it is an issue that must be studied.
“Government top-up is not a solution to this issue,” he said, adding that voluntary contribution is also subject to individuals who feel that they have enough funds to add to their pension contribution.
The minister was responding to YB Pehin Orang Kaya Pendikar Alam Dato Paduka Seri Hj Hasrin’s concerns that some pensioners have trouble sustaining their lifestyle with their retirement funds.
“What I fear is that pensioners are forced to seek government aid to meet their household needs,” YB Pehin Dato Hj Hasrin said.
The minister said his ministry is working with TAP to find a solution to ensure pensioners have enough funds for their daily expenses.
Once the study has been completed, he said the ministry will discuss with stakeholders before introducing new measures.
Rise in fiscal budget
The Ministry of Finance and Economy (MoFE) on Thursday tabled a budget of $853.01 million for the 2020/2021 fiscal year, an increase of 4.8 percent from the previous year’s allocation.
The bulk of the budget will be spent on staff wages amounting to $65.94 million, a rise of $2.9 million to accommodate 87 new job posts after the ministry absorbed the industry portfolio from the Ministry of Energy in November last year.
YB Dato Dr Hj Mohd Amin said $549.32 million has been allocated for miscellaneous services, including $2 million for Brunei’s preparation as ASEAN chair next year, $30 million for medical services at Jerudong Park Medical Centre, $4.45 million to develop Temburong district, $28 million for student allowances, $15 million for national disasters and disease outbreaks as well as $4.87 million for experts and skilled teachers.
A total of $89.38 million has been budgeted for projects under the 11th National Development Plan including the establishment of Brunei stock exchange, development of Pulau Muara Besar and socio-economic census.
Recurring expenses have been allocated $697.62 million, a decrease of $31.5 million from the previous fiscal year.
YB Dato Dr Hj Mohd Amin added that the ministry will continue implementing various projects including the fiscal consolidation programme to study the feasibility of outsourcing facility management through public-private partnerships, and the release of an economic blueprint and industry roadmap this year.
Suggestion to impose remittance and tourism tax
LegCo member YB Iswandy Ahmad suggested imposing remittance tax as expatriates working in Brunei transferred money worth $723.8 million in 2018.
“I am of the opinion that this amount of money is significant enough and if we decide to tax this appropriately, it could provide significant revenue to the country,” he said.
In response, the minister said imposing tax on international money transfers may not be a suitable move for Brunei.
“We may have to take a more in-depth look into this issue, as it may present itself as having more negative implications to us now,” he added.
YB Iswandy also raised the possibility of introducing a tourism tax in view of the 278,136 tourists who visited Brunei in 2018.
He suggested the tax to be included in hotel accommodation or tourist attractions.
The minister said there are countries, such as Dubai, that impose these taxes but Brunei must first consider whether its tourism industry is established or still developing.
“If it is in the latter and we decide to impose this tax, we must consider whether it would hinder our tourism development.
“This is an issue to discuss with the minister of primary resources and tourism before we deem it suitable to be carried out,” he added.