KUALA LUMPUR – The Inland Revenue Board (LHDN) said it believes the government's target of RM143.9 billion direct tax collection next year is reasonable, as it is backed by the economic recovery.
LHDN chief executive officer Datuk Seri Sabin Samitah said Malaysia’s economic growth projection of between 6.5% and 7.5% next year, coupled with the government’s proactive measures taken through various economic stimulus packages and global economic growth, would help LHDN realise the target.
“RM143.9 billion or 40.9% of tax collection will come from direct taxes, which represents 55.7% of total government revenue for 2021, reasonable considering the projected increase in economic growth next year,” he said today during the Deloitte Tax Academy’s TaxMax series live webcast called “A conversation with the Director-General of Inland Revenue Board Malaysia - Taxation for nation-building and sustainable growth”.
The session was part of a three-day webinar.
Answering a corporate tax issue, Sabin said lowering corporate tax was impossible under the current unprecedented business climate brought about by the Covid-19 pandemic.
“The government can only reduce the corporate income tax rate provided it introduces new taxes.
“It is important to note that a 1% reduction in corporate tax will have a significant revenue loss of more than RM2.6 billion for the country,” he added.
Sabin also said the reduction in corporate income tax must be replaced with other taxes, for example, capital gains tax.
“Lowering the corporate income tax rate will not be the only way Malaysia can have a competitive advantage over neighbouring countries.
“Conducive investment climate and repackaging incentives towards specific investors will attract foreign direct investment,” he said. – Bernama, November 23, 2020
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