How do sectors like tourism affect 2021 tax targets?

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Sectors like tourism and flight are considered in the 2021 tax collection targets.

The national tax collection target for 2021 has been set at RM144 billion, a figure comparable to pre-pandemic levels in 2019. This target takes into account the ongoing impact of the Covid-19 pandemic, which continues to affect key sectors such as flight and tourism. The continued struggles within these industries raise questions about the realism of expecting incomes to fully recover to 2019 levels by 2021.
Consideration of Pandemic-Struck Sectors

The target for 2021 tax collections is RM144 billion, which aligns with the RM140 billion collected in 2019. This target is being questioned due to the persistent effects of the Covid-19 pandemic, which has significantly impacted sectors like flight and tourism. The assumption behind the target is that incomes will rebound to pre-pandemic levels, a notion challenged by the ongoing economic disruption.
Economic Context and Previous Collections

In 2017, when the economy was performing well, the Inland Revenue Board (LHDN) collected approximately RM123 billion in taxes. This figure rose to over RM140 billion in 2019, despite a slowdown in economic growth. However, collections dropped to RM123 billion in 2020, directly attributed to the pandemic's impact on the economy. The 2021 target of RM144 billion therefore represents a significant increase from the 2020 figures and a level exceeding even strong economic periods prior to the pandemic.
Impact on Graduate Salaries and Employment

Beyond the direct impact on sectors like tourism and flight, the broader economic conditions influenced by the pandemic have also led to a decrease in starting salaries for graduates. This decline in entry-level wages suggests a general pressure on income levels across the workforce, which in turn could affect overall tax revenue generation. The continued widespread nature of Covid-19 further complicates projections for economic recovery and the potential for income growth.

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How do sectors like tourism affect 2021 tax targets?

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