Measures such as taxing the T20 group more and luxury goods and reintroducing a voluntary disclosure programme in the revised Budget 2023 are expected to increase the government's tax collection by four percent over total revenue this year compared with 2022, according to Deloitte Malaysia.
Deloitte Malaysia tax leader Sim Kwang Gek said the budget has reintroduced the voluntary disclosure programme which covers both direct and indirect taxes.
"The proposal to offer a 100 percent waiver of penalties for voluntary disclosures made between June 2023 to May 31, 2024 will provide a boost to the government’s tax collection.
"The full waiver of penalties is more attractive than the previous voluntary disclosure programmes introduced by the Inland Revenue Board (IRB) where a 10 percent, or 15 percent penalty is imposed on tax undercharged, depending on when the voluntary disclosure was made.”
Sim said this in a statement in response to the revised Budget 2023 tabled by Prime Minister Anwar Ibrahim at Parliament yesterday.
On the capital gains tax, she said it is interesting to note that the government is mulling over the introduction of a capital gains tax albeit not a full-blown one as it is proposed to be levied only on the disposal of unlisted shares.
"This indicates that the government is taking a phased approach, before embarking on a full-blown capital gains tax," she added.
On the reduction in personal income tax rates for the middle 40 percent income group (M40), she said although the two percentage points cut would result in lower tax collection, the impact should be minimal since the money saved would be contributed back to the economy in the form of higher consumption.
Budget 2023 proposed a two percentage points reduction in the personal income tax rates for individuals earning an annual chargeable income between RM35,001 to RM100,000.
It is expected to result in a tax savings of RM300 for those earning between RM35,001 to RM50,000; RM700 for those earning between RM50,001 to RM70,000 and RM1,300 for those earning between RM70,001 to RM100,000, she added.
As for small and medium enterprises (SMEs), Sim said the corporate tax reduction of two percentage points to 15 percent from 17 percent on annual chargeable income of up to RM150,000 for SMEs should bring some cheer to these groups.
"This is effective from the year of assessment 2023 and it appears that SMEs would be subject to three progressive tax rates depending on the level of annual chargeable income," she said.
Sim explained that annual chargeable income of RM150,001 to RM600,000 would be subject to a corporate income tax rate of 17 percent, while the amount in excess of RM600,000 would be subject to 24 percent.
"While the rate cut provides some relief to SMEs, the tax savings of RM3,000 may not be significant in view of the current challenges faced by SMEs.
"A two percentage points cut on annual chargeable income of up to RM600,000 would be more meaningful, and having a two-tier tax rate will also be simpler for SMEs to administer," she said.
- Bernama
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