Friday 29 Mar 2024
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KUALA LUMPUR (Oct 8): The country's tax base should be broadened, which in turn would help the government to increase its tax revenue by bringing more people into the tax bracket, says Chartered Tax Institute of Malaysia (CTIM), ahead of the tabling of Budget 2020 on Friday.

Its president Farah Rosley said however, any new taxes that may be introduced or planned need to be evaluated to understand its impact to the country, people and businesses.

"The execution of such tax policies too needs to be done carefully and without causing uncertainties to businesses and people generally. There needs to be a balance between the level of government's revenue required and the desire for economic growth," she said in a statement today.

Farah also said Budget 2020 should continue to give emphasis on businesses and continued economic growth. "A matter of concern to businesses is funding. It will be most welcome should there be a special tax deduction or relief provided for cost of financing, in particular if the financing cost is in respect of expansion of a business to achieve higher growth, new technology, research and development activity or purchase of equipment related to scientific or state of the art apparatus or tools."

With the shift in tax policies, she pointed to the importance for tax practitioners and the industry bodies to have regular dialogues with the tax authorities to ensure that any changes or proposed changes to the rules and regulations do not adversely impact business transactions or cause uncertainty in respect of the tax treatment.

She said continuous engagement with tax administrations will allow for greater collaboration, as well as the establishment of a tax framework that is robust and applicable to business issues.

"The digitalisation of the economy, the adoption of new business models, updated interpretations of tax rules, changes to local and global tax policies, and transparency of data and information are just some factors that are impacting tax in business.

"In this regard, consultation and dialogues with institute such as CTIM has allowed for better understanding of how tax policy or legislation impact businesses and avoid uncertainty on the interpretation of the rules and legislation," she added.

Farah noted that as talent development and upskilling are important to ensure sustainable growth and competitiveness, CTIM is proposing a special tax deduction on training cost of employees, hiring of fresh graduates, people development and required skills such as in the field of science and technology or new innovative industry sector be introduced in the upcoming national budget.

"Tax deduction on interest and reduction in stamp duty for purchase of residential house are some measures that can also be continued or extended to ease the cost of buying houses," added Farah.

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