Pua: Gov't to set up tax reform committee soon

HIGHLIGHTS:

• Pua says gov’t may look into ways to ensure more eligible taxpayers pay their taxes
• Dr M engages in “more consultation” now compared to first PM tenure

The government will set a committee to review its tax policies soon, says Finance Minister Lim Guan Eng’s special officer Tony Pua.

Among others, the committee will look into matters such as the reliefs available under Malaysia’s income tax scheme; how to make taxation more progressive; and whether it is necessary to make it compulsory for everyone to register as a taxpayer, regardless of whether they need to pay taxes or not.

“So, these would all be studied under a tax reform committee, which will be set up soon,” the Damansara MP told a forum with his constituents in Petaling Jaya yesterday.

The forum was organised by the Taman Paramount DAP branch and was attended by about 60 people.

Pua said this when asked whether it is necessary for the government to have two separate agencies collecting taxes, to which Pua said he was unable to offer a direct response.

“It is one of the issues we are looking at. We will be forming a tax reform committee. The tax reform committee will look at that question, as well as all the other questions that are arising,” he said instead.

Currently, direct taxes such as income tax and corporate tax are collected by the Internal Revenue Board, while indirect taxes such as duties, excised, and previously the Goods and Services Tax (GST) were collected by the Royal Customs Department.

Reducing the ‘tax gap’

Pua said Malaysia’s income tax laws haven’t changed since the 70s, and many people are not “caught” in the income tax bracket. Instead, only 15 percent are eligible to pay taxes, and this narrow tax base was one of the reasons why GST was implemented in the first place.

“But even without GST, there is more that we can do to reduce the tax gap. One of the problems is that only 15 percent of the population is paying tax, but why is it only 15 percent? Because you never go out and collect from the additional ten percent, for example.

“How do you make that happen? How do you implement processes? Do you get everyone to register as taxpayers whether you pay taxes or don’t pay taxes?” he said, adding that tax authorities have a right to know how much people earn to ensure that the correct amount of taxes is being levied.

Dr M 'more consultative now'

Meanwhile, Pua was also asked whether Prime Minister Dr Mahathir Mohamad had really changed since his first premiership from 1981 to 2003, and whether he had really become more consultative in his decision-making.

Pua said replied in the affirmative, and said Mahathir regularly complained that his ideas were being overruled.

“Is he more consultative? Nowadays he complains a lot. I know that for a fact because it’s the same thing in Pakatan Harapan meetings.

“(He says) ‘Everyone says I’m a dictator but every time I suggest something, the decision gets overturned, so how can I be a dictator?’. We hear that a lot whether in cabinet meetings or staff (meetings).

“So, there is more consultation. There are certain things he insists on, and he should because he is the prime minister. He has that prerogative, but he doesn’t do that on every point. A lot of times, he gives way to the cabinet minister,” he said.

He added Mahathir in his previous terms would have never appointed a person like Lim Guan Eng as finance minister, or Tommy Thomas as attorney-general.

In addition, he said the previous Mahathir would have never rescinded his decision to appoint himself as education minister-designate simply because his party’s election manifesto forbids it.

Mahathir had announced on May 17 that he would take on the education portfolio, despite an election pledge that the prime minister shall not hold another portfolio.

Many Harapan leaders appeared to be caught unawares, and were under the impression that the manifesto only prohibited the premier from simultaneously holding the finance portfolio.

A day later, Mahathir said he would abide by the manifesto promise, and Simpang Renggam MP Maszlee Malik was subsequently sworn in as education minister instead. - Mkini