CYBERJAYA: The Finance Ministry has confirmed that a new tax will be announced by Finance Minister Lim Guan Eng in the tabling of the 2019 Budget in Parliament on Friday.
Deputy Finance Minister, Datuk Amiruddin Hamzah said the new tax will not burden the people, and that its revenue would be used for the people as well as reduce the burden of repaying the national debt left behind by the previous government administration.
“In any case, let the finance minister table the new tax.
“What’s important is that the revenue will be used for the upkeep of government operations ensure the continuity of the development agenda, close the urban - rural development gap, as well as settle the government debt,” he said.
Amiruddin was speaking to reporters after officiating the Inland Revenue Board’s (IRB) Innovation and Integrity Day here on Thursday.
Also present were Deputy Accountant-General Dr Yaacob Mustafa and IRB chief executive officer Datuk Seri Sabin Samitah.
He said the new tax was suggested by the Tax Reform Committee formed by the Finance Ministry, as a means to study appropriate measures to be taken to increase tax progressively without burdening the lower-income B40 group.
Amiruddin said the committee is chaired by former IRB chief executive officer Tan Sri Hasmah Abdullah.
He said the committee has also identified the tax gap, including imposing tax on the digital economy; reviewing the effectiveness of tax incentives; finding ways to minimise tax leakage; as well as reviewing the taxation system as a whole.
On the high national debt, Amiruddin said the government is considering letting go of some of its assets to raise funds needed to resolve the problem.
“There are suggestions for government assets such as lands be released to local investors to be developed and proceeds from the development will be channelled back to the government,” he said.
Meanwhile, Amiruddin said the government would utilise the tax collection in the best possible and transparent way to motivate the people to contribute to national growth.
Citing the voluntary zakat payments as an example, he said the people would not mind paying taxes if they knew that it would be returned to them.
“For example, when we set up Tabung Harapan, the people came forward to help reduce national debt even though some of them may not earn very much,” he said, adding, he hoped the people would have the same mindset when they see that the government is transparent in collecting and utilising the tax in an effective manner.
Prior to this, Lim, during a Parliament session last month, had only hinted at the introduction of a new tax.
Lim had said that the new tax could generate more revenue for the country, after admitting that the shift from the Goods and Services Tax (GST) to the Sales and Services Tax (SST) saw a decline in government revenue.
Prime Minister Tun Dr Mahathir Mohamad was also reported as saying that the government planned to introduce a new tax to help tackle the high national debt, on top of mulling other options such as disposing of national assets such as land.
Meanwhile, Sabin, in his speech, said the IRB will intensify tax collection activities to reach the target set by the ministry, which is RM140.113 billion this year.
He said the IRB will also execute any mandates which will be announced by the government in the 2019 Budget.