KUALA LUMPUR – There may be a need for the Government to recalibrate the 2017 Budget next year, as the economic scenario may not be that attractive then, said Taxand Malaysia chairman Dr Veerinderjeet Singh.
He said the recalibrated 2016 Budget, which was announced in January this year, was largely due to the steep fall in global oil price.
“For 2017, if the oil price remains stable, it may be fine but if the economic climate still does not improve, tax collection keeps dropping and goods and services tax (GST) revenue declining…I do think the Government needs to do budget recalibration either in the first or second quarter.
“We hope this does not happen but it is something that needs to be taken note of,” he told a press conference in conjunction with the 2017 Budget Outlook and Challenges Seminar in Kuala Lumpur on Wednesday.
Veerinderjeet said the recalibration announcement would not happen as soon as January as the Government would have to monitor and collate data from corporates for indicators of a possible budget recalibration in the first or second quarter.
Meanwhile, Taxand Malaysia was positive on the establishment of the Collection Intelligence Arrangement agency, tasked to enhance efficiency in tax collection and compliance.
He said considering that this was a cooperation between the Royal Malaysian Customs Department (Customs) and the Inland Revenue Board (IRB), this would ensure that all information the Customs and IRB had were integrated.
Veerinderjeet hoped this arrangement would also be extended further to look at the underground economy, for example, businesses that were under the radar and bring them up to the surface.
Commenting on a possible merger between Customs and IRB in relation to tax collection, he said: “When the GST was announced, many of us were consulted by the authority and we proposed that they (Customs and IRB) be merged, but this could not be done.
“GST is under Customs and it is a government department while the IRB is a corporatised department.
“Only when the Customs is corporatised, then it is possible to merge elements of Customs and GST within the IRB,” he said.
Veerinderjeet said Taxand Malaysia was positive on the merger of the Customs’ GST unit with the IRB because when everything is under one roof, a single audit covering both income tax and GST could be done.