Gov't to find 'balance and equilibrium' before imposing higher taxes

The federal government will strive to find a "balance and equilibrium" before imposing higher taxes on citizens, Finance Minister Lim Guan Eng said today.

While there is a need to increase taxes, Lim said the government would find a "balance" so as to not impact the people too drastically.

The government would seek an "equilibrium" so as not to cause too much of an impact on people's lives, which would not be easy.

"That is why we have the Hari Pelanggan (Clients Day), which is a good initiative, so we can hear inputs and suggestions from taxpayers, so that we can improve confidence, and there may be no need for court action," Lim said.

The minister said this at a press conference after officiating the Directors' Meeting of the Inland Revenue Board of Malaysia (IRB), which involved the participation of 237 IRB officers for a three-day event in George Town today.

Lim said the government would study the situation carefully before imposing higher taxes on citizens.

He said the department does not intend to be "inconsiderate or tough" on citizens when it plans to increase the collection of taxes.

Lim (above) added: "We do not plan to tax people beyond their limits. We will consider first our economic growth. Currently, we just want taxpayers to abide by the law.

"Which is why we have field audits, where we ask for documents, instead of approaching them aggressively, with M16 and balaclava masks, which happened the last time.

"We will not follow the former government's approach but will act according to the law."

Lim also reiterated that the government was focused on reducing the impact of the shadow economy, which has now totalled 21 percent of the country's GDP, involving some RM300 billion.

The shadow economy includes all economic activities, including corruption, that are hidden from authorities for monetary, regulatory and institutional reasons.

Lim said the phenomena of a shadow economy occurs when there are illegal activities, such as smuggling and non-compliance with the laws, which are "criminal in nature".

'Corruption is something that is not alien to us'

He added: "And, of course, corruption is one aspect of the shadow economy, something that is not alien to us.

"Which is why we proposed to implement a cashless society and this can be done when we start using the e-wallet.

"We will not do it abruptly as it would impact those who are not familiar yet with the usage of digital payment," Lim added.

"Certainly, we are going into the direction to reduce the shadow economy."

To eradicate the shadow economy, Lim said, there must be tight enforcement involving all related agencies, including the police and Customs Department.

He conceded that enforcement against illegal activities such as smuggling involved the work of many agencies, therefore there needs to be a "holistic approach" to deal with the matter.

"If we can reduce this shadow economy by 25 percent, it would be impactful to our economy," Lim said.

According to the Inland Revenue Department, this enforcement would currently be focused on foreigners.

Asked about the current elected representatives who may be involved in such illegal activities, Lim said they are some from the previous administration who are under investigation by the Malaysian Anti-Corruption Commission (MACC).

"So far, there is none from this administration," he added. - Mkini