KUALA LUMPUR: The government is implementing two main initiatives namely Tax Identification Number (TIN) and e-invoice to address shadow economy activities that lead to tax evasion.
Deputy Finance Minister 1 Datuk Seri Ahmad Maslan said from 2000 to 2009, the size of the shadow economy was estimated to be 30.2 per cent of the gross domestic product (GDP) of the country.
However, it dropped to 21.2 per cent from 2010 to 2019.
Ahmad Maslan explained that the decline was due to the country's implementation of the goods and services tax (GST) from 2015 to 2018.
He added that it is known that GST implementation can reduce the shadow economy by 10 per cent.
"However, we are not implementing GST this year, and there's been no announcement for next year. So, how do we reduce the shadow economy without GST?
"The approach is through the implementation of e-invoice, which was recently announced by the Prime Minister in the budget presentation. Another method is through the implementation of TIN, which began in 2022.
"These methods are based on best practices adopted by tax authorities in other countries to address the issue of the shadow economy," he said at a press conference after the launch of the Kocek Coin Conversion Service (Kocek) here today.
In essence, shadow economy activities encompass economic activities that are illegal under the law, such as criminal syndicates or what is commonly referred to as the underground economy.
Meanwhile, Pertama Digital Bhd announced the launch and expansion of Kocek services in collaboration with Pos Malaysia Bhd.
The partnership will enable Kocek to offer its innovative coin conversion services at Pos Malaysia branches nationwide.
Currently available at four locations in the Klang Valley, the service is expected to expand to about 30 branches by the end of 2023.
The Kocek services will be proliferated to other states in stages in 2024, with plans to launch 100 locations.
Pertama Digital chairman Datuk Ahmad Nazri Abdullah said through the partnership, Pertama Digital will have access to Pos Malaysia branches nationwide, providing Kocek coin conversion service (Kocek In) and coin purchase convenience (Kocek Out) for businesses and traders.
The Kocek service is available through the company's MyPay application, which enables seamless communication with selected government agencies.
Pertama Digital plans to roll out the service aggressively across Malaysia in the near future.
"We are grateful to Pos Malaysia for this collaboration, and we believe it will be a win-win situation for all stakeholders involved.
"Our ultimate goal is to digitise and reach as many people as possible, and Pos Malaysia branches perfectly complement our efforts. With Kocek, individuals can effortlessly convert their spare coins into enhanced spending power," Ahmad Nazri noted.
Pos Malaysia group chief executive officer Charles Brewer said the introduction of Kocek at Pos Malaysia branches is a true testament to its pledge to offer seamless solutions for the everyday needs of the community.
"Kocek represents more than mere convenience and embodies Pos Malaysia's values of constantly driving innovation and delighting our customers," he added.
The Kocek services were initiated by Pertama Digital to invigorate the recirculation of unused coins among Malaysians.
Annually, a significant amount of coins issued by Bank Negara Malaysia are not returned for recirculation, with the estimate of up to 30 per cent or more than 200 million pieces of coins issued every year ending up being kept unused at home, in jars, and drawers, as "dead coins."
Kocek provides easy access and fast service to help the Rakyat to convert their collection of unused coins into digital cash value, transferred to their bank accounts.
This will, in return, reduce the need to mint and distribute new coins and help lower the cost of issuing currency for the central bank.