KUALA LUMPUR, Jan 16 — The Inland Revenue Board (IRB) said today it aims to collect RM127 billion in direct tax, a target of around 10 per cent of the national gross domestic product (GDP) this year.

IRB deputy chief executive officer (management) Datuk Mohd Nizom Sairi said this figure attempts to emulate the amount of taxes collected in developed countries which is currently around 14 per cent of GDP.

"The aim for 2017 is RM127 billion. This aim has been set by the government. This takes into consideration all the economic considerations.

"Compared to developed countries, there is a huge tax gap here. Even if we can reach 10 per cent of the GDP we are happy," he said this morning when launching an event at the board's headquarters.

"IRB gives our full commitment to ensure that the collection of our direct tax is on par with that of developed nations where the amount of taxes collected is at least 14 per cent of the GDP.

"Our GDP is at the moment around the amount of RM1.2 trillion," Nizom explained.

Malaysia’s GDP for 2015 was recorded at US$296.3 billion, or roughly RM1.32 trillion. That year, the IRB had collected RM116.8 billion in direct tax, nearly 9 per cent of the GDP.

To achieve this target, he said IRB will implement an "aggressive tax planning" strategy this year.

The board will also actively probe the misuse of shell companies especially those in Labuan, Sabah which he said have been increasing of late.

"Based on information collected, we have found that there are non-resident companies in cahoots with resident companies and tax agents to evade tax, using such methods," he said.

Nizom added that IRB would also be zeroing in on cases involving large repayments.

"IRB will conduct audits on such cases, especially investment holding companies that adopt aggressive tax planning that results in repayments. To address this, I have instructed that repayment cases identified as high risk be audited," he stressed.