The Board collected RM145b worth of gross tax last year, lower than its target of RM147b
by ASILA JALIL / pic by ARIF KARTONO
THE Inland Revenue Board (IRB) is reviewing the tax collection target for this year which will be lower than the initial target of RM154.68 billion due to the Covid-19 pandemic.
IRB deputy CEO (tax operation) Datuk Mohd Nizom Sairi said the new proposed figure, which is based on Malaysia’s current economic performance, has been sent to the Finance Ministry, but the ministry has yet to decide on the final numbers.
“Malaysia’s GDP contracted by 17.1% in the second quarter, so you can imagine the impact on the tax collection.
“It is just an estimate, but the amount (reduced), I can say it is significant as a result of what is happening now,” he told reporters at the Second Malaysia Tax Policy Forum in Putrajaya yesterday.
He said the new estimated amount will be more than RM100 billion as it cannot be too low than the initial target announced earlier this year.
Mohd Nizom said the new target will be taken into account for the draft of the nation’s budget next year as the tax collection this year determines the forecast and strategies that would be laid out for 2021.
The IRB collected RM145.08 billion worth of gross tax last year, lower than its target of RM147 billion.
Mohd Nizom also noted that a higher tax rate would translate into better infrastructure in the country, as shown by advanced economies globally such as in Europe and Australia.
Improvement in infrastructure, however, does not only rely on the increase in tax rate, but is also dependent on the efficiency in the management of the revenue collected, he said.
He added that there are other means for the government to improve the infrastructure in the country such as private funding initiative.