RM35b in uncollected taxes, what reforms? Just go after the tax dodgers, starting with Najib ‘1MDB’ Razak, others

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RM35b in uncollected taxes, what reforms? Just go after the tax dodgers, starting with Najib ‘1MDB’ Razak, others

KUALA LUMPUR, Feb 27, 2025: The Public Accounts Committee (PAC) has revealed that the Inland Revenue Board (LHDN) recorded RM34.6 billion in uncollected taxes in 2023 and called for reforms.

What reforms? Just go after the tax dodgers, starting with the disgraced and shameless former prime minister Najib “1MDB” Razak, and other high-profile super rich who owe taxes.

No News Is Bad News reproduces below a news report on PAC’s “rubbish” call for reforms to collect taxes:

PAC calls for reforms after RM34.6bil in taxes uncollected in 2023

FMT Reporters

-27 Feb 2025, 01:07 PM

The committee says the RM5.8 billion decrease from the previous year was due to loopholes that could lead to revenue leakage.

The Public Accounts Committee also recommended other reforms such as stricter enforcement, better tax assessments, and stronger laws to curb tax evasion. (Bernama pic)

PETALING JAYA: The Public Accounts Committee (PAC) has revealed that the Inland Revenue Board (LHDN) recorded RM34.6 billion in uncollected taxes in 2023, a decrease of RM5.8 billion from the previous year.

PAC chairman Mas Ermieyati Samsudin attributed the decline to tax write-offs and reduced tax assessments.

“The reduction is attributed to taxpayer appeals (56.2%), court decisions (8.2%), and tax exemptions under Section 127(3A) of the Income Tax Act 1967 (35.6%),” she said in a statement today.

However, she warned of potential leakage in tax collections, citing a loophole that allows LHDN officers to approve tax reductions without a clear limit.

“The power to approve tax reductions has been delegated to officers at various levels, including state branches, without a fixed limit.

“PAC sees it as a loophole that could lead to revenue leakage. This opens the door to possible leakages,” she said.

PAC initiated its proceedings on Nov 5, 2024, following the release of the Auditor-General’s Report 3/2024, which highlighted issues in the federal government’s financial statements for 2023.

The parliamentary watchdog noted that LHDN had introduced new measures to tighten governance, including mandatory audit committee reviews for cases involving more than RM10 million.

Mas Ermieyati added that LHDN had implemented an internal tracking system, ReMS 2.0, to detect non-compliance, and would soon enforce e-invoicing to improve tax collection.

Other key findings from the PAC report included an increase in tax arrears from RM18.484 billion in 2017 to RM43.693 billion in 2021, largely due to stricter enforcement by LHDN through audits and investigations.

PAC also recommended reforms such as stricter enforcement, better tax assessment processes to reduce appeals, and stronger laws to prevent tax evasion.