#Reaction: Comprehensive Budget For Well-Being Of Rakyat -- Tax Consultants
KUALA LUMPUR, Oct 28 (Bernama) -- The 2018 Budget is deemed comprehensive as it deals with the well-being of the rakyat in addressing wide-ranging issues, from the rising cost of living, to even shaping the future of the workforce, some tax consultants concur.
For Jagdev Singh, Tax Leader of PwC Malaysia, many of the measures announced were focused on the man on the street, such as addressing issues of the B40 and M40 groups, civil servants and women in the workforce.
But, he also noted the lack of significant measures that impact corporates directly as tax rates remained the same, along with existing incentives.
"I expected a reduction in personal tax rates after the implementation of the Goods & Services Tax (GST) in 2015 and Budget 2018 certainly delivered on that.
"The tax benefit of up to RM1,000 will benefit a large number of taxpayers. However, there were no changes to existing reliefs," he said in a statement in responding to the Budget announcement by Prime Minister Datuk Seri Najib Tun Razak yesterday.
While a reduction in corporate taxes was not expected in Budget 2018, he had hoped that targeted measures based on productivity increases, and investment in research & investment be introduced, which was visibly missing.
Meanwhile, Amarjeet Singh, Partner and Tax Leader of EY Malaysia said the measures for middle-income earners such as the two per cent reduction in income tax for chargeable income between RM20,000 to RM70,000, as well as extension of the Skim Simpanan Pendidikan Nasional (SSPN) tax relief, should alleviate some of the burden arising from the rising cost of living.
To him, the 2018 Budget promises a positive outlook and inspires investor confidence in the nation with its strong focus on the private sector and recognition of the role of the small and medium enterprises (SMEs), with measures even being extended to micro entrepreneurs which demonstrated the depth of the initiatives in place.
Chang Mei Seen, Executive Director - Transfer Pricing, KPMG Tax Services, while agreeing that the focus of the 2018 Budget was on the well-being of the rakyat , she also commended the government's commitment to economic information sharing introduced by the Organisation for Economic Cooperation and Development (OECD), through the automatic exchange of information commencing from September 2018.
"What this means is that information can be exchanged between tax administrations on a confidential basis. Hence, this commitment aims to combat Base Erosion Profit Shifting (BEPS) activities on the onset," she added.
Such transparency will provide tax administrators with valuable and insightful information when conducting risk assessment, potentially with the use of data analytics, to evaluate whether the corporate taxpayers may potentially be engaged in BEPS activities to shift profits away, which would otherwise have been taxed in Malaysia.
"This initiative is a powerful tool to allow the government to see the big picture of multinational operations and conduct more effective risk assessments to protect their fair share of taxes. Enhanced tax audit activities are almost guaranteed to be the way forward," Chang said.
-- BERNAMA
