Q1 tax revenue beats target, Customs falls short

BY LEE WEI LIAN
MAY 28, 2012

The government has delayed implementing a GST following public resistance. — File pic

PETALING JAYA, May 28 — The Inland Revenue Board collected RM162.5 million in taxes in the first quarter against the official target of RM150 million, according to figures released by Pemandu today show.

Customs collection, however, amounted to only RM30.3 million, short of the targeted RM41.4 million.

But the department managed to detect RM371.5 million of claimable and undeclared duty based on audits on companies.

Improved tax collection is one of the strategic reform initiatives under the Economic Transformation Programme (ETP) aimed at bolstering public finances.

The number of Malaysians that pay income tax is estimated to be only about one million out of a population of about 28 million.

Malaysia is currently grappling with a federal budget deficit, which improved tax revenue could help address.

The government has postponed, however, the implementation of the broad based goods and services tax (GST) due to public resistance.

The World Bank said late last year that the Malaysian government is overly dependent on oil revenues — which contribute more than 40 per cent to the country’s budget — to fund its expenditure.

Prime Minister Datuk Seri Najib Razak acknowledged at the Economic Transformation Programme (ET)) briefing here that the initiative had come under criticism for being project centric and for “masking the need for a change in fundamentals.”

He said, however, that the improved tax collection showed that efforts made under public finance reforms were bearing fruit.

A media statement from Pemandu said measures implemented by the Inland Revenue Board include enhancing usage of data warehouses to identify high-risk cases to be audited and a re-engineering of audit processes to make these more effective.