Prime Minister Najib Abdul Razak today said a special taskforce working on plugging the illicit ouflows has shown “early success”.

“We are working on this. The taskforce involves the Auditor General (AG), Bank Negara and other departments including the Internal Revenue Board,” he said.

NONE Speaking to reporters after launching Bank Negara Malaysia’s Financial Blueprint 2011-2020, Najib ( right ) said the taskforce has especially been succesful in curbing one source of leakage - tax evasion.

“Incidences of tax evasion have been substantially reduced,” he said.

Najib said tax revenue for 2011 is expected to be a whopping RM22 billion more than last year, surpassing this year’s target by RM7 billion.

“We are pursuing more and more steps to ensure the leakages will be addressed,” he said.

Najib was commenting on a study by financial watchdog Global Financial Integrity (GFI) which found that Malaysia had lost an astounding RM150 billion in 2009 alone through illicit means.

The PM, who is also finance minister, added that the haemorrhage has however not affected the domestic economy.

“We have a robust domestic economy. If (the ouflows) had negatively impacted (the economy), then we would not have very strong domestic demand,” he said.

Najib, who had also launched Malaysia’s new currency at the event, said that the GDP forecast for the year and next year remain at five percent.

“We are on course, provided that we continue to have strong domestic demand, private sector investment and foreign direct investment, which has shown to be on an upward swing this year,” he said.

He added that the economy needs to grow at an average of six percent for the next 10 years to achieve its 2020 target.

Gov’t to further liberalise the financial sector

The PM also said that the government will further liberalise the financial sector to allow more foreign equity holdings in the banking sector.

“There are opportunities for us to consider on the basis of the merits of each case,” he said, adding that the foreign banks must meet a certain set of criteria.

He added that there will also be opportunity for foreign banks with “special niche areas” which do not compete with local banks to enter the market.