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Tuesday, September 29, 2020

Covid-19 forces IRB to significantly lower 2020 tax collection target

 

The IRB had submitted the new tax collection target for 2020 to the finance ministry based on the Covid-19 pandemic situation.

PUTRAJAYA: The Inland Revenue Board (IRB) is revising downwards its tax collection target for 2020 from the RM154 billion projected in January, prior to the implementation of the Movement Control Order (MCO).

Deputy CEO (tax operations) Mohd Nizom Sairi said the IRB had submitted the new tax collection target for 2020 to the finance ministry based on the Covid-19 pandemic situation.

“The reduction is just an estimate. I can say it is a significant reduction but the taxes collected will be more than RM100 billion,” he told reporters after a dialogue session at the Second Malaysia Tax Policy Forum here today.

He said this year’s tax collection level would determine the forecast and strategy for next year.

Nizom said the flexibilities given to companies would be on a case-by-case basis.

“The IRB will look at the business situation. There are those who have been affected badly, but there are also companies that have benefitted (from Covid-19),” he said.

Meanwhile, Deloitte Malaysia country indirect tax leader Tan Eng Yew said the time was not right for the government to bring back the Goods and Services Tax (GST) although it was a much more efficient tax than the Sales and Service Tax (SST).

He said sufficient time must be given for businesses to prepare and people to gain enough training to understand what the government was trying to do before returning to the GST regime.

“Personally, I think six to nine months’ preparation is sufficient for the businesses to get back to GST,” he said.

Tan said the GST rate should not exceed 6% that was implemented previously

“The needs of the rakyat must be preserved. The rate should not be burdensome,” he said.

Malaysia implemented GST at a rate of 6% effective April 1, 2015, before reverting to SST in September 2018. - FMT

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