Can Malaysia hit RM139 billion tax revenue target this year?

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Malaysia Aims to Meet or Exceed RM139 Billion Tax Revenue Target This Year

The Malaysian government anticipates achieving or surpassing its RM139 billion tax revenue collection target for the current year, aiming to restore revenue levels to those seen before the COVID-19 pandemic. To support this objective, the Inland Revenue Board (IRB) is being tasked with developing and implementing both short-term and medium-term strategies. These strategies encompass the identification of emerging economic sectors and the transparent, effective, and efficient application of tax laws, with the overarching goal of bolstering public trust and ensuring taxpayer compliance.
Strategies to Boost Tax Collection

The IRB's management is central to formulating the necessary strategies to meet the RM139 billion revenue goal. This includes proactively identifying new economic sectors that can contribute to tax revenue and ensuring that tax laws are applied with a high degree of transparency, effectiveness, and efficiency. The emphasis on these principles is intended to increase the trust of the Malaysian populace and reinforce the understanding that taxpayers have responsibilities to fulfil.
Initiatives for Enhanced Transparency and Efficiency

To further enhance the efficiency and transparency of the tax collection system, the government plans to implement a Tax Identification Number (TIN) system and a Tax Compliance Certificate (TCC). A significant development is the requirement for businesses seeking government projects to possess a TCC, which will become a mandatory prerequisite starting in 2023. This measure is part of broader fiscal reforms aimed at strengthening the business sector and improving the labour market through a more streamlined and open taxation framework.
Fiscal Reforms and Medium-Term Revenue Strategy

Looking ahead, the government is committed to enacting fiscal reforms that promote a more efficient and transparent taxation system. This commitment will be formalised through the tabling of the Fiscal Responsibility Act, designed to elevate governance, accountability, and transparency in fiscal management. Concurrently, a Medium-Term Revenue Strategy will be developed, which will outline clearly defined revenue targets and advocate for a tax system that is transparent, fair, and equitable, leveraging the capabilities of big data analytics.
Recent Performance and Economic Outlook

The recent performance of tax revenue collection provides a positive backdrop for the current year's target. In 2021, tax revenue collection saw a substantial year-on-year increase of 17 per cent, reaching over RM140 million. This growth occurred alongside a broader economic recovery, with Malaysia's Gross Domestic Product (GDP) expanding by 3.1 per cent in 2021, a notable improvement from the 5.6 per cent contraction experienced in 2020. The government maintains a confident outlook for 2022, projecting GDP growth between 5.5 and 6.5 per cent, supported by the expansionary Budget 2022, the revival of economic and social activities, and robust external demand.

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Can Malaysia hit RM139 billion tax revenue target this year?

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