Malaysia Still Has A Low Tax Base, PM Says (Updated)

Prime Minster Dato Sri Anwar Ibrahim reminded all Malaysians that the nation has a low tax base which is around 11.2% of GDP, compared to other neighbouring countries such as Singapore (12.6%) and Thailand 16.4%.

Speaking at the Inland Revenue Board’s (IRB) Tax Day (Hari Hasil) Ceremony today (Mac 1), Anwar said the number of companies that pay tax is also still low which is around 435,000 companies compared to 1.5 million companies registered in Malaysia.

“This means that less than 29% of registered companies pay tax.”

“In 2023, IRB succeeded in creating a new history of national tax collection at a figure of RM183.34 billion, exceeding RM7.8 billion or 4.49% of the total collection compared to last year.

“Until December 31, 2023, the number of individual taxpayers is as much as 5.7 million with collection revenue of RM40.96 billion and for companies it is as much as 539,113 with collection revenue of RM98.77 billion.”

Through the ongoing Voluntary Declaration Special Program (PKPS) 2.0, IRB has received 68,806 voluntary declaration cases as of 15 February 2024, amounting to RM610.62 million from new and existing taxpayers.

Increased revenue from efforts by the IRB and Royal Malaysian Customs Department has helped to improve the Compassionate Basic Donation (SARA) programme whose payment has been doubled as the number of recipients jumped to 700,000 compared to 210,000 last year.

Seperatly, Anwar wants efforts to reduce the country’s fiscal deficit to continue so that future generations will not be burdened.

He said continuous efforts and initiatives are important for the country to achieve a lower fiscal deficit target, while at the same time continuing to restore the confidence of domestic and foreign investors to invest here.

As of the end of December 2023, government debt totalled RM1.17 trillion or 64.3 per cent of the gross domestic product.

Debt growth in 2023 was 8.6 per cent, lower versus 10.2 per cent recorded in 2022.

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