KUALA LUMPUR: The Federation of Chinese Associations Malaysia (Huazong) has implored the government to downward revise its tax collection target, for this year and next year, and to go easy on the taxpayers.
Urging this, its President Tan Sri T.C Goh opined that this is necessary and appropriate in view of the devastating economic and financial impact of the persisting Covid-19 pandemic, and the series of Movement Control Orders (MCOs) and standard operating procedures (SOPs), on the people and businesses.
He said, for this year and next year, the government should not aim too high in its tax collection, for both individuals and businesses, besides making preparations and taking effective measures, especially in preparing its budget and expenses. This is in order to better address the far-reaching adverse impacts of the pandemic, especially, and to avoid aggravating the financial position of the country.
He added that, except for a small number of businesses which are not affected by the pandemic and continue to make profit could afford to pay taxes on time, those businesses and individuals who barely meet the requirement for taxation, should be given tax reliefs or assistance, so as to help ease their financial burden and to maintain the much needed cash flow during this devastating period of time.
“We propose the government to consider giving special targeted tax reliefs to the middle income individuals and small-and-medium enterprises (SMEs) who barely qualified for taxation, at least for last year and this year,” he proposed.
He said this in a statement issued today, while welcoming and supporting the government’s recent announcement in the Pemerkasa Plus economic stimulus package, that the Inland Revenue Board Malaysia (LHDN) will consider appeals for the postponement of tax penalties to the year 2022 and will reschedule overdue tax payments for affected taxpayers and businesses.
Goh who is also President of the Federation of Chinese Associations Sabah (FCAS) hoped the government could strive to fine tune its taxation to better assist the people and businesses to get through this difficult time.
“Over the past one year, the pandemic has caused thousands of businesses and companies to wind up, or on the verge of doing so, or continue to operate at a loss. Many companies also have applied for/waiting for the series of government financing and aids. Hence, how can they afford to pay corporate taxes?” he said.
He noted that, last year, Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz instructed the LHDN to raise its tax collection target from RM127 billion to RM143.9 billion, for this year.
While agreeing that those individuals and businesses which are unaffected by the pandemic should continue to fulfill their obligation of paying taxes, Goh also welcomed the government and LHDN’s relaxation of taxation policies against those who have lost their incomes, or defaulted on tax payments during the pandemic.
He noted that, the government’s direct and indirect tax collections include personal income tax, corporate income tax, oil and gas revenues, stamp duty, real property gains tax, etc, which constitutes an average of 70% of government’s total tax collections; the other indirect taxes include export tax, sales and services tax, gaming tax, etc.
Meanwhile, he came out with the following 5-point proposal for the government’s consideration:
1. Government to downward revised its tax collection target for this year and next year, for corporate income tax and personal income tax, at least.
2. To avoid deploying high-handed tactics of tax collection, especially on those taxpayers with good track records and justified reasons.
3. To consider giving special targeted tax reliefs to those individuals and small-and-medium enterprises (SMEs) who barely qualified for taxation, or assistance, so as to help ease their financial burden and to maintain the much needed cash flow to stay afloat during this devastating period of time.
4. In regards to LHDN’s consideration for appeals for the postponement of tax penalties to the year 2022, we proposed that LHDN reduce the tax penalties across the board, and to waive such penalties for those taxpayers with valid and justified reasons.
5. Proposing the LHDN to temporarily postpone the monthly tax deduction (MTD) for employees.- pr/BNN
