How would a multi-year tax calendar benefit Malaysia's economy and businesses?

Sinar Daily

7 days ago

SHAH ALAM - The concept of a multi-year tax calendar has emerged as a potentially transformative measure for Malaysia's tax framework, aimed at promoting transparency, increasing compliance and enhancing long-term economic stability.
Experts believe that such a policy could benefit not just businesses but also the government by enabling better planning and ensuring more predictable revenue streams within a single fiscal framework.
The idea, discussed by tax professionals at a recent forum, centres around setting out tax changes including new taxes, adjustments to rates and implementation timelines, possibly over a three to five-year period.
This would help businesses anticipate regulatory changes, make informed decisions and build trust in the tax system by offering a moderate, phased approach to taxation.
Speaking at the roundtable programme 'Mapping the Journey of National Tax Reform', RDS Partnership Senior Associate Nur Hanina Mohd Azham said the calendar would allow businesses to anticipate and better plan their operations.
"A multi-year tax calendar will benefit the government because it gives businesses the ability to anticipate and plan better," she said. RDS Partnership Senior Associate Nur Hanina Mohd Azham
According to her, the implementation helps to manage businesses more efficiently by providing awareness of upcoming changes
'When businesses can manage their operations more efficiently through early awareness of upcoming tax changes, it leads to higher compliance. In the long run, this increases revenue collection for the government," she added.
The call for a structured tax timeline comes after recent public outcry over abrupt tax changes, such as the introduction of the High-Value Goods Tax (HVGT) and amendments to service tax laws, which were rolled out within weeks of being announced.
Taking the point further, Tax Partner at Ernst & Young Tax Consultants Sdn Bhd, Jalbir Singh Riar said the introduction of a multi-year tax calendar would significantly improve public confidence and help businesses avoid being blindsided by abrupt policy changes.
"I think having this tax calendar makes a lot of sense. It gives businesses and consumers confidence that there won't be sudden announcements.
"Take the HVGT or the service tax expansion, for example, those were announced and implemented almost overnight. That uncertainty is what we want to avoid," he explained.
According to him, a multi-year tax calendar would not only support better planning but also foster trust and long-term compliance by removing the element of surprise in tax implementation. It would provide a more predictable environment for all stakeholders.
"If the government can commit to a calendar that says, for example, GST will return in 2027, then businesses can prepare, budget and align their operations accordingly. That clarity benefits everyone," he said.
One of the key questions raised was about the implementation process on who has the authority to enact such a calendar and how binding it would be?
Jalbir explained that the power to draft and introduce the tax schedule lies with the Finance Ministry adding that it does not necessarily require parliament's approval unless it involves new legislation. Tax Partner at Ernst & Young Tax Consultants Sdn Bhd, Jalbir Singh Riar
"The power lies with the Finance Ministry to draft and introduce the schedule. This doesn't necessarily require parliament's approval unless new legislation is being tabled.
"The Finance Ministry can decide on the tax roadmap in consultation with stakeholders and issue it as part of budget announcements," he said.
The underlying goal, both experts stressed, is ensuring that the rakyat (people) are not burdened by taxes and that businesses have sufficient lead time to adapt.
'The rakyat must ultimately benefit. They must not feel a heavy tax burden just because implementation was rushed. The multi-year tax calendar is a step toward achieving that balance," he added.
As Malaysia's economy continues to recover and evolve in a post-pandemic world, industry leaders believe that a long-term, predictable tax policy is essential for national growth and investment confidence.
Experts conclude that this foresight allows companies to better anticipate and plan their operations and budgets, fostering more efficient management and consequently, improving voluntary tax compliance, which can lead to more stable and higher government revenue.
Furthermore, a clear tax schedule is expected to build greater public confidence and trust in the government by alleviating the confusion and negative impacts often arising from sudden tax policy announcements.
The roundtable discussion programme "Creating Resolutions" focused on the topic "Mapping the Journey of National Tax Reform", and featured panelists including Petaling Jaya Member of Parliament Lee Chean Chung, tax lawyer Nur Hanina Mohd Azham from RDS Partnership, Jalbir Singh Riar, Indirect Tax Partner at Ernst & Young Tax Consultants Sdn Bhd and Datuk Syed Naqis Shahabuddin Syed Abdul Jabbar, President of the Bumiputra Retailers Organisation Malaysia (BRO).
The session took place at Studio F, Sinar Harian.