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TALKING POINTS

YANG BERHORMAT TUAN LIM GUAN ENG

MINISTER OF FINANCE

for

COUNTDOWN TO

SPECIAL VOLUNTARY DISCLOSURE PROGRAMME

MENARA HASIL PETALING JAYA

16 SEPTEMBER 2019

 

Yang Berbahagia Dato’ Sri Sabin Samitah
Chief Executive Officer
Lembaga Hasil Dalam Negeri Malaysia

Ms Farah Rosley 
President of the Chartered Tax Institute of Malaysia 

Yang Berbahagia Tan Sri Datuk Ter Leong Yap 
President of National Chamber of Commerce and Industry Malaysia 

Yang Berbahagia Tan Sri-Tan Sri, Dato’-Dato’, Honoured Guests and Participants 

Members of the Press 

Ladies and Gentlemen 

Salam sejahtera and a very good morning to all 

A. Opening

  1. I am indeed very delighted to be here today and to see all of you at this programme. I am confident that this programme will not only serve to provide the participants with the relevant tax information but equally important as a platform for promoting better networking, engagement and cooperation between Lembaga Hasil Dalam Negeri Malaysia (LHDNM) and their supporting partners; the Chartered Tax Institute of Malaysia (CTIM) and the National Chamber of Commerce and Industry Malaysia (NCCIM).

  2. The main objective of today’s programme is to share with the audience on the initiatives and policies undertaken by the government in the area of taxation, specifically the Special Voluntary Disclosure Programme, or SVDP

    B. Special Voluntary Disclosure Programme

    Ladies and gentlemen,

  3. For those who are hearing about the SVDP for the first time, it is an initiative announced by the government in the 2019 Budget which was tabled on 02 November 2018.

  4. The SVDP serves as an avenue for taxpayers, especially for taxpayers with overseas bank accounts who have Malaysian source income, which has yet to be declared for Malaysian tax purposes.

  5. At the same time, the SVDP provides an avenue for any taxpayer who has forgotten or failed to fulfil his or her tax obligation, to come forward and declare the right amount of income during this period without incurring high and burdensome penalty rates.

  6. The SVDP, which begun on 03 November 2018 was due to end on 30 June 2019. However, based on the positive feedback in the first phase of the programme which ended on 31 March 2019, the government agreed to extend the programme to 30 September 2019.

  7. In this last phase of the SVDP, taxpayers who come forward and voluntarily declare their misreported income and deductions will be offered a low penalty rate of only 15 percent.

  8. After the end of this programme, LHDNM has been mandated to impose a minimum penalty rate of 45 percent up to a maximum of 300 percent as stipulated under the Income Tax Act 1967.

  9. Therefore, I encourage taxpayers to make full use of this one time initiative, as there will be no extension or repeat of such programme in the pipeline, in the near future.

  10. I would also like to bring to your attention the Automatic Exchange of Information (AEOI) initiative by the Organisation for Economic Cooperation and Development (OECD), whereby Malaysia has started receiving financial information specifically with regard to offshore banking accounts beginning September 2018.

  11. Through this initiative, LHDNM will have access to a huge pool of data, both from within the country as well as that received from its foreign tax counterparts.

  12. This will aid and assist LHDNM in drawing up tax compliance strategies based on the input received from AEoI and to go after tax evaders who have failed to declare their income.

  13. Therefore, the SVDP acts as an opportunity for taxpayers with outstanding tax issues to voluntarily make the right declaration before enforcement activities are carried out by LHDNM after the end of the programme.

  14. Be rest assured, LHDNM will issue taxpayers who partake in the SVDP with a clearance letter, as an assurance that the voluntary disclosure which has been made in good faith, has been received by LHDNM, also in good faith, and no further review will be made on that declaration.

  15. I have also cautioned LHDNM’s officers to act in a professional manner when attending to taxpayers and not to resort to arbitrary tactics in their dealings with the public. The days of midnight raids of homes, armed with weapons and wearing balaclava masks are over! LHDN must adopt a friendlier, kinder, gentler approach and treat taxpayers who contribute taxes as partners. 

  16. Please be rest assured that taxpayers who come forward during the SVDP will not be classified as tax evaders, as is the perception among certain quarters.

  17. Rather, the SVDP is a break for taxpayers who were negligent or careless in attending to their tax matters. Hence the low penalty regime offered is a win-win situation for both the taxpayer and the government.

  18. Therefore, I urge you to put aside any doubts that may still be lingering around the implementation of the SVDP and to grab this “gift” by the Pakatan Harapan government by acting accordingly before 30 September 2019.

    C. Budget 2020

    Ladies and gentlemen.

  19. Moving forward, we each have a role to play in nation building. The current trade war between the United States of America and China has left its mark on the global economy, including Malaysia

  20. Therefore, the government has an uphill task in not only managing the coffers of the nation, but at the same time reducing the debt it is laden with while maintaining a healthy fiscal deficit.

  21. However, I must stress that the Malaysian economy is still growing substantially and is on an upwards trend. This is evidenced by tax collection going up by 8.94 percent as at 31 August 2019 as compared to the same period last year. 

  22. On top of that, the Malaysian economy is expected to grow sustainably in the third quarter of 2019, after the GDP grew robustly at 4.9 percent in the second quarter of this year.

  23. Malaysia has also benefited from investment diversion. Data from the Malaysia Investment Development Authority (MIDA) shows that approved foreign investment in the first half of 2019 has increased 97.2 percent to RM49.5 billion from RM25.1 billion a year ago.

  24. We will take full advantage of the trade war between the US and China by attracting foreign investors to Malaysia, especially in the manufacturing sectors in a bid to create employment for fellow Malaysians while keeping a steady watch on the economy in a move to take measures to prioritise sustainable economic growth.

  25. Therefore, Budget 2020 which is less than a month away from being tabled will be a platform for the government in streamlining strategies and policies to boost the economic growth of Malaysia without burdening the rakyat

  26. We have also received overwhelming response from the public through the dedicated e-mail for Budget 2020 proposals since it was opened on 9 August 2019, and ended on 11 September 2019. 

  27. We will go through every suggestion received which not only focuses on incentives from the government and tax reduction, but also on how it could boost the economy.

  28. At this point, I assure that no new tax measures will be introduced in the upcoming budget.

  29. However, I would like to announce that the donation reporting threshold to LHDNM has been increased to RM10,000 as stipulated in LHDNM’s new guidelines dated 05 September 2019. Therefore, only information of those who donated RM10,000 and above should be provided to LHDNM, instead of information on those who donated RM5,000.00 and above before this. 

  30. I would also like to echo LHDNM’s advise to parties seeking approval under subsection 44(6) of the Income Tax Act 1967 to comply with all requirements set out in the guidelines to prevent their approval status being revoked due to any non-compliance.<

    D. Closing

    Ladies and gentlemen,

  31. Before I end, I take this opportunity to thank LHDNM, CTIM and NCCIM, for this strategic collaboration in disseminating tax information in an orderly manner to members of the public. 

  32. To the participants, please make full use of today’s programme to clear any uncertainties regarding the SVDP. The panel from LHDNM will be more than willing to facilitate you in answering any questions needing further clarification.

  33. On that note, I declare open the Countdown to Special Voluntary Disclosure Programme.

Thank you.

YB Lim Guan Eng
Finance Minister
16 September 2019