Thursday 28 Mar 2024
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KUALA LUMPUR (Sept 14): Former Inland Revenue Board (IRB) director-general (DG) Tan Sri Hasmah Abdullah has been appointed as the chairperson of the newly-established tax reform committee.

In a statement today, Finance Minister Lim Guan Eng said Hasmah has 37 years’ worth of experience in tax administration, five of which as IRB DG.

"Since the federal government is not planning to increase the corporate and individual tax rate, it is taking a holistic approach in reforming its taxation system in order to address this matter. The tax reform committee will be tasked at broadening and diversifying the federal government’s tax revenue without placing additional burden on the rakyat, as well as to minimise tax leakages," he said.

"Any new tax under consideration must be efficient, neutral and progressive to promote long-term sustainability, productivity and economic growth," he added.

The committee is joined by finance and tax experts Dr Verinderjeet Singh, Datuk Chua Tia Guan and Amardeep Singh.

Meanwhile, Tax Department secretary Datuk Khodijah Abdullah, Tax Department deputy secretary Mohd Sakeri Abdul Kadir and Fiscal and Economic Department deputy secretary Mr Mohd Hassan Ahmad will represent the Ministry of Finance.

Among the main objectives of the committee are to reduce the existing tax gap, address tax leakages, explore new sources of revenue, study the taxation of the digital economy, and review the effectiveness of various tax incentives as provided by the law.

Lim also said the gap in revenue collection must be addressed as it could prevent the federal government from carrying out its social and developmental mandate, noting that a new comprehensive study on the Malaysian taxation system is needed to make it more efficient, neutral and progressive, as well as capable of generating high-quality growth.

"If implemented properly, any tax measures can be more targeted and more progressive. Most of these tax measures are also already being pursued by developed and neighbouring countries. More importantly, these tax measures should not add further burden to the lower income group," he added.

Lim said the federal government will also strengthen its enforcement and compliance measures against fraud, tax evasion and the smuggling of controlled items that contribute to the loss of revenue.

"Malaysia faces revenue loss due to direct smuggling of contraband goods and indirect smuggling where some exporters make false declarations or produce fake invoices. These are usually facilitated by shipping, forwarding and transport agents. Streamlining and strengthening enforcement actions are the keys in combating smuggling activities at our land and sea borders.

"Greater focus will be accorded on material cases of tax evasion, particularly on companies that are abusing transfer pricing and tax planning activities. Fighting all networks engaged in smuggling activities and tax evasion requires joint efforts between the authorities within and outside Malaysia," he said.

"To do so, the federal government will deepen cooperation between the various domestic and foreign authorities," he added.

 

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