BERNAMA – Malaysia expects to implement two-pillar taxation approach in 2024 –

KUALA LUMPUR, Oct 18 (Bernama) — Malaysia has agreed to implement the “two-pillar strategy” in taxation to create a aggressive atmosphere for each overseas and home direct funding, stated Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz.

The strategy, which additionally prevents cross-border tax evasion, is being studied at current and estimated to start in 2024, he stated in his keynote speech on the 51st Examine Group on Asia-Pacific Tax Administration and Analysis (SGATAR) Annual Assembly 2022 as we speak. 

The 2-pillar strategy refers to the Base Erosion and Revenue Shifting (BEPS) 2.0 initiative spearheaded by the Organisation for Financial Co-operation and Improvement (OECD) and G20.

Tengku Zafrul additionally stated the federal government intends to section within the digital invoicing system (e-invoicing) beginning subsequent 12 months as a way to enhance the effectivity of the federal government’s tax system.

“The implementation of e-invoicing will even support within the implementation of a sustainable digital enterprise ecosystem and offers a extra dependable audit path, leading to elevated tax transparency, and is considered as one of many main methods for growing tax income,” he stated. 

In line with him, this would complement one of many authorities targets for small and medium enterprises (SMEs) beneath the twelfth Malaysia Plan, which is to digitalise 90 per cent of SMEs’ operations by 2025.

“The implementation of e-invoicing will even assist using the Tax Identification Quantity (TIN), which will likely be necessary for all paperwork and devices.

“This will likely be a measure to broaden the gathering of earnings taxes, making certain a sustainable income for the federal government,” he defined. 

In line with Tengku Zafrul, the implementation is per the OECD report on digital identification of taxpayers, which recognises digital identification as one of many key constructing blocks for future seamless tax administration. 

In the meantime, the Inland Income Board of Malaysia (LHDN) chief government officer Datuk Dr Mohd Nizom Sairi stated e- invoicing will tighten up the leakages in taxation system and subsequent 12 months will be the 12 months to organize in the direction of the implementation. 

“We’re trying into having a pilot run possibly in 2024,” he instructed reporters on the sidelines of the assembly. 

He stated SGATAR has performed a significant function to offer a platform in enhancing the efficiency of tax administrations within the Asia-Pacific area by selling collaboration and communication amongst member tax administrations.

“This time round, the heads of delegations will deal with three areas of debate, specifically addressing new challenges in tax administration with deal with human useful resource and organisational construction; enhancing voluntary compliance; and up to date growth within the tax administration and updates on tax reform,” he added. 

— BERNAMA

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