THE Inland Revenue Board (IRB)‘s gross tax collection for direct taxes for 2018 has amounted to RM137.035 billion, said Finance Minister Lim Guan Eng.

He said direct taxes collected in 2018 increased by 11.13% or RM13.723 billion compared to the amount collected in 2017, creating a new record in direct tax collection, at the same time, outperforming the record set in 2014, which was RM133.700 Billion.

He said this rise is attributable to increased collection from components of taxpayers such as companies, individuals, petroleum, cooperatives, stamp duty and others.

“Besides reflecting the effectiveness of a clean leadership and an administration based on the principles of competency, accountability and transparency, this increase also shows that economic growth was encouraging in 2018,” Lim said in a statement today.

Revenue collection from income tax (other than petroleum) contributed RM116.953 billion or 85.35% of the total collection in 2018. The corporate component was the biggest contributor at RM70.036 billion or 51.11%, followed by the individual component at RM36.065 billion or 26.32%.

Tax revenue from petroleum was RM20.082 billion or 14.66%, stamp duty collection stood at RM5.934 billion or 4.33%, withholding tax collection at RM3.117 billion or 2.27%, RPGT collection at RM1.467 billion or 1.07%, cooperatives tax collection was RM0.171 billion or 0.12% and lastly Labuan IOFC and other taxes stood at RM0.163 billion or 0.12%.

Lim credited the “encouraging collection performance” to “realigned tax collection strategies” after Pakatan Harapan swept into power after the 14th general election.

He also said tax enforcement activities, specifically activities involving audit and investigation, were conducted in a more professional manner and focused tax education programmes.

He also cited improvements to the process of imposing travel restrictions on taxpayers with tax arrears; and stringent use of provisions under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act in enforcement activities.

“These factors have directly increased the confidence and trust of the rakyat towards the government and have encouraged them to voluntarily declare and pay their taxes.”

“The Pakatan Harapan government also wishes to thank the rakyat who have carried out their duty in paying taxes and hope that the rakyat will continue to carry out this responsibility for the advancement of our country, Malaysia.”

To reduced tax leakages and increase tax compliance rate, Lim said the special voluntary disclosure programme was launched starting November 3, 2018 and will end on June 30, 2019 with low penalty rate of 10% and 15%.

“Therefore, the government urges taxpayers who have compliance issues to take up the offer by participating in the programme to avoid being imposed a higher penalty rate of 80% to up to 300% when the programme ends,” Lim said. – January 20, 2019.