KUALA LUMPUR: More than 77,000 taxpayers voluntarily filed outstanding income tax returns after being prompted by e-Invoice data, declaring over RM6.5bil in income and more than RM1.38bil in taxes due, says the Finance Ministry.
The government is seeking to strengthen the country’s fiscal position by improving revenue collection, reducing leakages and tackling smuggling and tax non-compliance, without relying solely on new taxes or higher tax rates, the ministry said.
It said a key focus was the shadow economy, including unregistered economic activities and income not declared to the tax authorities.
The Inland Revenue Board (LHDN) has introduced the Tax Identification Number (TIN) to widen the tax base and improve transparency in the reporting of business transactions, the ministry added.
The e-Invoice system allows transaction information to be obtained more systematically and in near real time, helping to strengthen audit trails, improve risk analysis and identify unreported economic activity, it said.
This allows audits and investigations to be more accurate and focused on higher-risk sectors and activities, while encouraging taxpayers to comply voluntarily, the ministry added.
The Royal Malaysian Customs Department recorded 3,609 enforcement cases between January and June this year, involving total seizures and duties or taxes amounting to RM1.30bil.
This was an increase of 21.7%, or RM232.54mil, compared with the corresponding period last year, the ministry said.
Enforcement efforts focused on the smuggling of high-duty goods such as cigarettes, alcohol and motor vehicles. They included document and physical inspections at entry points, inspections of licensed manufacturing warehouses and licensed warehouses, targeted operations at major ports, and audits of high-risk sectors and commodities, it added.
The ministry said the government was also expanding information-sharing among enforcement agencies, local authorities, professional bodies and international institutions.
This includes international tax information-sharing mechanisms, such as the Automatic Exchange of Information, Common Reporting Standard and Country-by-Country Reporting, to identify non-compliance, improve audit case selection and strengthen enforcement action, it added.
The ministry was responding to Bera MP Datuk Seri Ismail Sabri Yaakob, who asked how much additional revenue the government expected to collect by curbing leakages, smuggling and tax non-compliance without raising taxes, in a written parliamentary reply on Monday (Oct 19).
The government’s strategy was not merely to raise revenue, but to make the tax system more efficient, transparent and fair by ensuring taxes due were collected rather than increasing the burden on taxpayers who had met their obligations, the ministry said.
