‘The shadow economy is shrinking due to TIN and e-invoice’

KUALA LUMPUR: Malaysia’s shadow economy currently accounts for 21% of the gross domestic product (GDP) or an estimated RM330bil, says Datuk Seri Ahmad Maslan.

The Deputy Finance Minister I said the current rate was lower than it was from 2000 to 2009 when it accounted for 30.2% of the country’s GDP.

The shadow economy refers to economic transactions that are deemed illegal, either because the goods or services traded are unlawful in nature, or because the transactions failed to comply with governmental reporting requirements.

Ahmad said the shadow economy shrunk mainly because the previous Goods and Services Tax (GST) between 2015 and 2018 had lowered the percentage dramatically.

He also said the government introduced two initiatives, namely the e-invoice and Text Identification Number (TIN), to reduce the number of illegal transactions in the country.

“Malaysian residents aged 18 and above were automatically given a TIN starting Jan 1, 2022, which will help the Inland Revenue Board track people’s tax payment profile and to better address tax evasion issues.

“The e-invoice, which involves digitalising credit, debit and invoice notes, will be implemented in stages next year,” he said at the launch of the Kocek coin conversion service here yesterday.

Ahmad said around RM240mil worth of coins produced by Bank Negara Malaysia annually were unused and left as “dead coins,” causing the government RM20mil each year.

Pertama Digital chairman Datuk Ahmad Nazri Abdullah said Kocek’s aim is to boost the recirculation of unused coins among Malaysians.

“Kocek is essentially a machine that converts coins into digital money that is then transferred into your bank account via a phone app.

“This will reduce the need to mint and distribute new coins and help lower the cost of issuing currency for the central bank,” he said.

Pos Malaysia Bhd group chief executive officer Charles Brewer said the company was glad to partner with Pertama Digital to offer Kocek services at selected Pos Malaysia branches.

“Currently available at four Pos Laju branches in the Klang Valley, the service is expected to expand to about 30 branches by the end of the year,” he said, adding that this would be extended gradually to other states next year.

Kocek is now available at Subang Parade, Berjaya Times Square, and NSK Trade City, in addition to four post offices namely Pejabat Pos Besar Kuala Lumpur, Pejabat Pos Besar Shah Alam, Pejabat Pos Kajang and Pejabat Pos Bandar Baru Bangi.