KUALA LUMPUR: The government is working to reduce tax leakages as one of the strategies to improve tax administration in the country, the Dewan Negara was told today.

Deputy Finance Minister II Mohd Shahar Abdullah said improvements would be made through data management and data integration strategies with relevant agencies.

“Among other strategies are to reduce the under-reporting and declaring, expanding government’s revenue base and harnessing the potential of the informal sector,“ he said when winding up the debate on the Finance Bill 2020.

Issues related to tax collection were raised by Senator Idris Ahmad and Senator Mohd Apandi Mohamad during the debate session.

Mohd Shahar said the Covid-19 pandemic was also one of the factors that affected tax revenue collection.

“Checks found that the government’s revenue collection decreased to RM227.3 billion compared to the original estimate of RM244.5 billion (18 per cent) during the tabling of Budget 2020 in 2019,“ he said.

Therefore, Mohd Shahar said the government was always proactive in strengthening tax revenue collection and enhancing its buoyancy through tax reform incentives.

Elaborating further, he said if the country’s economy recovered in the medium term, the government would expand the revenue base by reducing the tax gap and increasing tax efficiency to ensure sustainable revenue collection.

“The goal will be achieved through the realisation of tax incentives, reducing tax leakage and improving tax compliance through effective auditing,“ he said.

He added that strengthening tax compliance would also be implemented by empowering the multi-agency task force. -Bernama