KUALA LUMPUR, Sept. 14 (Xinhua) — The Malaysian government on Friday announced the establishment of a Tax Reform Committee to review overall tax system, following the reintroduction of the sales tax system that will see a significant drop in tax revenue.
The committee will be tasked at broadening and diversifying the Malaysian government’s tax revenue without placing additional burden on the people and minimize tax leakages, Finance Minister Lim Guan Eng said in a statement.
“Any new tax under consideration must be efficient, neutral and progressive to promote long-term sustainability, productivity and economic growth,” he said. Most of these tax measures are already being pursued by developed and neighboring countries, he added.
The government also has no plan to increase the corporate and individual tax rate, hence the government is taking a holistic approach in reforming its taxation system, Lim said.
“The gap in revenue collection must be addressed as it could prevent the Federal Government from carrying out its social and developmental mandate,” said Lim.
Lim said the government will strengthen enforcement and compliance measures against fraud, tax evasion and the smuggling of controlled items that contribute to the loss of revenue.
The committee is formed after the Pakatan Harapan government honored its election promise by replacing the Goods and Services Tax or GST with Sales and Services Tax or SST, which will reduce tax collection by 23 billion ringgit (5.56 billion U.S. dollars) in 2019.