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KUALA LUMPUR: While the special voluntary disclosure programme (SVDP) is not new, the revised 2023 Budget has made it more attractive, said PwC Malaysia tax leader Jagdev Singh.
The SVDP was first introduced in the 2019 Budget with reduced penalties of 10-15 per cent on additional taxes for taxpayers who came forward to declare their unreported taxes.
"This was emulated for indirect taxes in 2022 Budget, in which the SVDP provided a channel for taxpayers to come forward and voluntarily disclose any unreported taxes or duties; with 50 per cent to 100 per cent remission of penalty.
"Budget 2023 takes it one step further, by announcing a full waiver of penalties for taxpayers who come forward under the SVDP, which covers both direct and indirect taxes," Jagdev said.
He added that this was a welcome move, not only in encouraging taxpayers to come clean on their tax affairs, but to encourage those who were previously not declaring taxes to come forward.
At the same time, the move would contribute to government revenues, Jaddev said, adding that the previous programme for direct taxes brought in additional taxes and penalties of close to RM8 billion.
Jagdev said the announcement to redefine the parameters of the type of investments Malaysia needed was important.
It was crucial, he said, to move away from focusing on capital investment alone and placing emphasis on the quality and multiplier effects in terms of creating high quality jobs and building key ecosystems to help the development of local players.
"Applying a tiered approach to the tax incentive would reward higher quality investments. Hence, I look forward to the announcement of the New Industrial Master Plan 2030 in the third quarter of 2023," he added.
The proposed tax incentives such as the Luxury Goods Tax, commitments to study the Capital Gains Tax and the 0.5 per cent and two per cent increase in personal tax rate for the tax brackets between RM100,001 to RM1 million should not come as a surprise, said Jagdev.
However, he noted the study on the potential introduction of Capital Gains Tax should be done on a measured basis to ensure that the benefits, namely the amount of tax revenue generated,
far outweighs the costs such as impact to the investment ecosystem and the administrative burden to tax authorities and taxpayers.
Jagdev said the budget did not provide details as to how subsidy rationalisation would unfold, other than the already increased electricity tariff for large corporations.
The reduction in subsidy expenditure is deemed to be primarily attributable to the lower oil prices, as compared to 2022, but he hopes to see further details on the proposed targeted subsidy scheme in the coming months.
Source: https://www.nst.com.my/business/2023/02/883873/tax-disclosure-initiative-not-new-2023-budget-makes-it-more-attractive-pwc?utm_source=nst&utm_medium=mostpop