KUALA LUMPUR: The government does not need to impose new taxes but should instead generate revenue from the untapped “shadow economy” that accounts for at least 21% of the gross domestic product (GDP), says a tax expert.
Malaysia Association of Tax Accountants president Datuk Abd Aziz Abu Bakar said that since the shadow economy accounted for about RM300bil of the estimated RM1.45-trillion GDP, the authorities could easily increase revenue collection by at least RM60bil.
“This could increase the projected RM244.5bil revenue for next year to more than RM300bil.
“It is only fair to existing taxpayers if players in the shadow economy were also compelled to pay income tax, ” he said on the sidelines of a seminar on national taxation at a hotel here Tuesday (Oct 15).
The so-called shadow economy includes retail businesses involving foreigners.
IRB chief executive officer Datuk Seri Sabin Samitah said the recently tabled Budget 2020 saw 99 amendments to various laws and regulations, as well as 23 amendments to subsidiary laws.
“There were 41 amendments to the Income Tax Act 1967,29 amendments to the Petroleum (Income Tax) Act 1976, four amendments to the Property Gain Tax Act 1976,24 amendments to the Labuan Business Activity Tax Act 1990, and one amendment to the Stamp Duty Act 1949, ” he said.