KUALA LUMPUR (April 17): Malaysia joined five other countries earlier this year in signing the Multilateral Instrument (MLI) to curb the abuse and misuse of tax treaties.
Chief Executive Officer of the Inland Revenue Board of Malaysia (IRBM), Datuk Seri Sabin Samitah said this brought the total number of signatories to 78.
“The MLI is a document that will have significant impact on the tax treaty network of our country.
“Malaysia is also part of the Global Forum on Transparency and Exchange of Information. We have stated our commitment to adhere to international standards with the implementation of the Automatic Exchange of information, beginning this year,” he said in his keynote address at the Malaysian Tax Conference 2018.
Malaysia, he noted, had taken the appropriate measure by joining the Organisation for Economic Co-operation and Development (OECD) Committee on Fiscal Affairs inclusive Framework since 2017.
The committee is specifically dedicated to curbing base erosion and profit sharing (BEPS) related issues.
"Being part of the inclusive framework, will allow Malaysia to be on an equal footing with other countries when it comes to governing international tax rules and at the same time, be transparent in our legislation and rulings. It thus provides multinationals the necessary comfort in respect of taxation.
“Therefore, IRBM, will continue with its drive to counter the threat of aggressive tax planning, BEPS and tax evasion practices that cause tax leakages. Curbing tax leakages through these methods will require enhanced cooperation between various local agencies, especially for information sharing on a timely basis,” Sabin said.
Meanwhile, President of the Malaysian Institute of Accountants (MIA), Salihin Abang said as tax accountants and practitioners are a vital part of the taxation compliance ecosystem, it is imperative for the organisation to create awareness and educate members and the profession on new and amended regulations to drive compliance.
“Better compliance will help the IRBM collect the right amount of tax to enable the delivery of public goods and services and support national development.
This is in line with MIA’s point of view, that it is the duty of every eligible Malaysian taxpayer to pay the right amount of tax for the purpose of nation building,” he said in his speech at the event.
Salihin also revealed that the MIA is expected to finalise the Digital Economy Blueprint and Technology Blueprint sometime this year.
"Tax compliance is becoming more digital. AI and Big Data can and will transform how you as tax practitioners and agents do your work,” he said.
On the issue of whether it was practical to abolish the Goods and Services Tax, Malaysian Association of Tax Accountants (MATA)'s Datuk Hj Abd Aziz Abu Bakar said it should not be looked upon as a long term solution to address issues on the cost of living and prices of goods.
"To effectively address the issue of prices of goods, it is better to look at effective measures to eliminate middle traders who are controlling the market, and ensure consumers can get a better price," he told reporters at the sidelines of the conference. — Bernama