The YTD collection is already higher than what was achieved in the corresponding period last year
By P PREM KUMAR & MARK RAO / Pic By AFIF ABD HALIM
Malaysia is expected to surpass the RM42 billion Goods and Services Tax (GST) collection target this year, says the Royal Malaysian Customs Department.
Customs DG Datuk Seri Subromaniam Tholasy said the year-to-date (YTD) collection is already higher than what was achieved in the corresponding period last year.
Last year, the department collected RM41 billion in GST and set a target to grow it by over 2% this year.
According to Subromaniam, the agency is set to bring in higher tax revenue for the year, based on the latest figure and the robust domestic economic growth.
“We are on track to collect over RM42 billion this year. This is the target but we are confident that we can do a little more,” he told reporters on the sidelines of GST Conference 2017 yesterday.
“If compared to last year, collection for 2017 shows an increase in line with the gross domestic product (GDP) growth of the country. This is what is mirrored by the GST collection.”
Malaysia achieved its fastest GDP growth since 2015 with a 5.8% growth in the second quarter this year, which was above market expectations. The economy is predicted to be above 5% for 2017 supported by better exports, private investments and consumption.
As of Sept 16 this year, there were 452,638 GST-registered companies, with approximately 100,000 registered on a voluntarily basis to claim input taxes and gain access to trading with large-scale companies.
Firms registering above RM500,000 in sales annually are eligible to register under the GST Act.
There were 2,568 GST-registered tax agents as of Sept 13 this year and 440 companies which were inactive.
Subromaniam said there remain leakages in the tax department’s collection net, with enforcement agencies presently working on addressing the issue.
“By looking at the number, having achieved 452,638 registered businesses under the GST within a short timeframe speaks volumes for the success of the GST implementation,” he said.
“It is difficult to remain outside the GST system but there are still some compliance issues which we are looking at.”
He added that the tax authority is hoping to improve compliance in the future to provide additional revenue for the government to support the economy.
Subromaniam also said the Customs is shifting its strategy from enforced to informed compliance via its Customs Blue Ocean Strategy 3.0 that strives to create awareness on the need for GST compliance as opposed to utilising punitive measures.
Also in the pipeline is the Assisted Compliance Assurance Programme which will allow better management of GST risk via a holistic review of companies’ internal systems managing the tax.
He said the Customs will execute its plan to instal dongle device-cash registers at the premises of GST-registered businesses to curb tax avoidance, though no timeframe was disclosed.