Inland Revenue Board chief executive officer Datuk Seri Sabin Samitah (third from left) officiated at the launch Malaysia Tax Conference 2018. He is accompanies by Malaysian Association of Tax Accountants president Datuk Abdul Aziz Abu Bakar (from left), Malaysian Institute of Accountants president Salihin Abang, Datuk Narendra Kumar Jasani and Saisol Ismail (right). NSTP photo by ROHANIS SHUKRI

KUALA LUMPUR: Income tax is the largest component of the country's revenue, contributing more than 50 per cent annually, to fund the nation's development policy and continuity of the people's well-being.

“Apart from construction of roads, hospitals, schools, the procurement of military assets for Malaysia’s security, tax revenue also goes to redistribute income via the 1Malaysia People's Aid (BR1M),” said Inland Revenue Board (IRB) chief executive Datuk Seri Sabin Samitah.

"My team strive to make it more convenient for income taxpayers who consistently execute their responsibility.

“We aim to raise awareness that income tax collection is key to our country's development. We aim to expand voluntary compliance and to reduce tax leakages," he said.

Currently, out of the 15 million employed adults in Malaysia, only 15 per cent pay income tax to IRB.

“We are committed to recover income tax arrears from individuals and corporate bodies, illegal outflow of funds and acts of corruption,” he said.

Rigorous auditing and investigations are being carried out by the IRB and the Attorney-General Chamber’s high-powered National Revenue Recovery Enforcement Team (NRRET).

The NRRET, set up in 2015, also include the police, Malaysian Anti-Corruption Commission, Bank Negara, Customs Department and the Companies Commission of Malaysia, among others.

“We are collaborating with other government agencies to update our database,” said Sabin.

He explained tax defaulters and evaders are being unfair to compliant taxpayers who responsibly contribute to the nation’s building, year after year.

"We must make every effort to plug loopholes so that eligible taxpayers cannot escape their responsibilities," he added.

Sabin was officiating at the opening of the Malaysian Tax Conference 2018, organised by the Malaysian Institute of Accountants (MIA) and Malaysian Association of Tax Accountants (MATA), here today.

Earlier this year, Malaysia joined five other countries in signing the Multilateral Instrument to enforce against individuals and corporates evading tax by abusing tax treaties.

“Malaysia is now part of the Global Forum on Transparency and Exchange of Information. We have stated our commitment to adhere to international standards with the implementation of the Automatic Exchange of information, beginning this year,” said Sabin.

He highlighted his team will continue to counter the threat of aggressive tax planning, base erosion and profit sharing and tax evasion practices that cause tax leakages.

On the issue of whether it was practical to abolish the Goods and Services Tax, MATA president Datuk Abdul Aziz Abu Bakar said it should not be looked upon as a long term solution to address issues on the cost of living and prices of goods.

"To effectively address the issue of costlier goods, it is better to look at effective measures to eliminate middle traders controlling the market, to ensure consumers get better value for their money," Aziz said.