Government could consider financial assistance on specific sectors or giving give taxpayers a tax break
By HARIZAH KAMEL / Pic By TMR File
MALAYSIA is not in any position to allocate more upgrades to sectors that have been badly impacted from the recent Covid-19 pandemic due to several factors.
Thannees Tax Consulting Services Sdn Bhd MD Thanneermalai Somasundaram explained that apart from the Covid-19 pandemic, the recent drop of oil prices and the global economic downturn had make it even impossible for the government to implement such measures.
“Malaysia does not have the capacity to give workers six month of tax all day long because on top of the country’s Covid-19 problem that has escalated, oil prices are low and the economic climate is not good,” he told The Malaysian Reserve (TMR).
He revealed that the country’s deficit of 3.8% will only increase if the government decides to allocate more money to assist those sectors.
“Everybody is predicting our deficit is going to increase so we just simply cannot print money to give away. “From what I understand, tax collections are down and this year they may not live up to meet the target of RM155 billion,” Thanneermalai said.
On separate note, Socio-Economic Research Centre ED Lee Heng Guie (picture) said the government could consider financial assistance on specific sectors namely manufacturing.
“Given that the manufacturing sector, especially the small and medium enterprises which are also impacted due to demand shocks and supply chain disruptions, hence the financial assistance and the deferment of monthly income tax payment can be extended to the sector,” he told TMR.
Nonetheless, the government must react depending on the pro- gress made on the containment of virus outbreak, added Lee.
Echoing Lee’s sentiment, Chartered accountants firm Harvey & Associates managing partner Harvindar Singh said the government should give taxpayers a tax break, at least until the Covid-19 situation is under control as this will give greater certainty of where the economy is heading.
“The following measures are needed to help taxpayers: Waiver of income tax for all individuals for the year 2020, delay of corporate tax payment and suspension of instalment payments by companies for six months and deadlines for filing for income tax returns for the year 2019 to be extended by two months as there is a great deal of disruption in the work being done by tax agents to file the tax returns in a timely manner,” he said.
He said that the measures can be reviewed again in two months and amended accordingly.
“The two-month period for submission is reasonable as tax agents can still do the work although being done from home and we’re reporting on income already earned in the past.
“A lot can happen in two months especially the Covid-19 pandemic and things may deteriorate very quickly if proper measures and controls are not in place which resulted in the possibility of taxpayers needing an additional economic stimulus,” he added.