By ALIFAH ZAINUDDIN / Pic By TMR
The government has appointed former Inland Revenue Board (IRB) DG Tan Sri Hasmah Abdullah (picture) as the chairperson of the newly established Tax Reform Committee.
Finance Minister Lim Guan Eng said Hasmah, who has 37 years of experience in tax administration, will be joined by tax experts Dr Verinderjeet Singh, Datuk Chua Tia Guan and Amardeep Singh.
Other members of the committee include Tax Department secretary Datuk Khodijah Abdullah, Tax Department deputy secretary Mohd Sakeri Abdul Kadir and Fiscal and Economic Department deputy secretary Mohd Hassan Ahmad who will represent the Ministry of Finance.
The committee’s main tasks are to reduce the existing tax gap, address tax leakage, 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.
“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 government’s tax revenue without placing additional bur- den on the rakyat, as well as minimising tax leakages.
“Any new tax under consideration must be efficient, neutral and progressive to promote long-term sustainability, productivity and economic growth,” Lim said in a statement.
Lim also said a new comprehensive study on the taxation system is needed to make it more efficient, neutral and progressive, as well as capable of generating a high-quality growth.
He added that the gap in revenue collection must be addressed as it could prevent the federal government from carrying its social and developmental mandate.
“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 said.
The federal government will work to strengthen its enforcement and compliance measures against fraud, tax evasion and the smuggling of controlled items that contribute to the loss of revenue.
Lim said Malaysia faces revenue loss due to direct smuggling of contraband goods and indirect smuggling where some exporters make false declarations or produce fake invoices.
“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. To do so, the government will deepen cooperation between various domestic and foreign authorities,” he said.