PUTRAJAYA: January 2021 is the target date for introducing the Tax Identification Number (TIN) for business or individual income earners aged 18, Deputy Finance Minister Datuk Amiruddin Hamzah said today.
This initiative would ensure no taxpayers fail to fulfil their tax obligations while providing fairness to those who have long been responsible in paying their taxes, he added.
In order to implement the initiative smoothly, engagement sessions with stakeholders would commence this year, he pointed out.
“There is an urgent need for a strong capacity to tax in order to carry out the policies that we have outlined, as taxation provides a stable and adjustable source of revenue that can be mobilised if needed,” he said at the Malaysia Tax Policy Forum “Strengthening Malaysia’s Fiscal Future” here.
In his speech that was read out by Inland Revenue Board (LHDN) CEO Datuk Seri Dr Sabin Samitah, Amiruddin said the government expects to collect RM244.5 bil in revenue in 2020, up RM11.2 bil from 2019 after excluding the one-off Petronas special dividend of RM30 bil.
He pointed out that despite the healthy increase in tax revenue, Malaysia still collects significantly lower taxes than some other countries.
For 2017, Malaysia’s tax revenue relative to gross domestic product (GDP) was only 13.1% , he added.
This, he said, was considerably lower than that of Vietnam, Chile, Poland and South Korea, which had tax-to-GDP ratios of 19.0%, 17.4%, 16.8% and 15.4%, respectively.
He also said that although Malaysia’s tax revenue as a share of GDP is comparable to Asean countries, less than 20% of the 14 million-strong workforce and 1.1 million business establishments pay income or corporate tax.
Meanwhile, former second finance minister Tan Sri Nor Mohamed Yakcop, a panellist at the forum, said that with the government’s sustainable tax policy, Malaysia would be able to meet the global economic challenges and move forward to become a developed nation.
He said the implementation of a proper tax policy has made Malaysia the competitive country that it is today.
“I believe we can overcome any challenge because the country, leadership and government servants have experience in facing challenges, including economic turmoil,” Nor Mohamed added. – Jan 9, 2020 Bernama
