KUALA LUMPUR (Oct 6): The auditor general has urged the government to closely monitor new borrowings used to repay maturing loans, as debts worth RM490 billion are due within the next five years.
The auditor general also emphasised the need for prudent debt management to reduce default risk, and called for continued fiscal consolidation to ensure that new borrowings remain below pandemic levels without hindering economic growth.
National debt servicing expenditure rose 9% to RM50.48 billion in 2024 from RM46.33 billion in 2023, mainly due to higher interest payments on the government’s outstanding debt of RM1.25 trillion as at Dec 31, 2024, according to the Auditor-General’s Report 3/2025.
Despite this, the report noted that the federal debt growth rate eased to 6.4% in 2024 from 11.4% in 2021, while principal repayments for maturing loans declined 12.7% to RM122.34 billion, reflecting fewer loans reaching maturity.
Revenue arrears up nearly 13%
Separately, the report revealed that various revenue arrears increased 12.8% to RM44.55 billion in 2024. Of this amount, RM20.67 billion — arrears older than six years — remain at risk of being written off, potentially leading to revenue losses for the federal government.
The Ministry of Finance recorded the largest share of long-standing arrears exceeding six years at RM20.40 billion, of which 92% were registered at the Inland Revenue Board (IRB).
Total arrears at the IRB stood at RM40.39 billion, of which corporate income tax made up RM26.25 billion as the end of 2024.
In its response to the auditor general, the tax authority said RM22.96 billion of the arrears were under legal proceedings, while RM16.35 billion were undergoing collection, instalment, audit and investigation processes.
To enhance recovery, the agency introduced the instalment option under e-Ansuran and travel restriction system e-Sekatan, to improve the payment of outstanding taxes.
An upgraded Revenue Management System was also launched on Jan 1, 2025, alongside the formation of a Civil Legal Task Force to strengthen enforcement and public awareness nationwide.
For more AG's Report 2025 stories, click here.