KUALA LUMPUR, April 15 — Former prime minister Datuk Seri Najib Razak questioned the Perikatan Nasional (PN) today for setting 2021 tax collection targets that were on par with levels just before the Covid-19 pandemic.
He said PN's tax collection approach appeared to be “pay first, discuss later” based on amended tax laws that required taxpayers to settle their assessed tax amount even if this was being legally disputed.
“Is is realistic to consider that everyone's incomes in 2021 will recover to the same levels in 2019, seeing as how Covid-19 is still widespread and when the starting salaries of graduates has dropped below the minimum wage level, and that several main national sectors including flight and tourism are still in a stranglehold?” Najib said in a Facebook post.
The former finance minister added that the direct tax collection by the Inland Revenue Board (LHDN) in 2018 and 2019 were far higher than compared to 2017.
“At the time many complained that LHDN was too aggressive in collecting taxes from the rakyat, as the economy at the time was declining since the government sought to replace the revenue from Goods and Services Tax, which was abolished by the Pakatan Harapan administration.
“When the economy boomed in 2017, the year before the 14th general election, LHDN's collections were approximately RM123 billion. This increased to over RM140 billion in 2019, despite the economic growth dropping to a 10-year low, and in 2020 the collections dropped to RM123 billion due to the pandemic,” he said.
Najib added that LHDN was now targeting RM144 billion in taxes for 2021, or on the same level as 2019 prior to Covid-19 hitting Malaysia, and far more than its collection of RM123 billion in 2017 when the economy was doing well.
He is the second political figure to speak out against Putrajaya's increased moves to collect taxes, as former finance minister Lim Guan Eng also criticised Prime Minister Tan Sri Muhyiddin Yassin for doing so, in light of the revelation that PN has spent up to RM600 billion in order to offset the economic damages caused by Covid-19.
During a speech to the assembly of DAP Parliamentary Liaison Committees for Bagan, Tasek Glugor And Permatang Pauh, Lim urged PN to raise the statutory debt limit instead of chasing taxpayers in order to replenish its depleting funds amid the Covid-19 pandemic.
He said the domestic debt market, which possesses a high liquidity of RM1.3 trillion, is a good alternative that could be tapped by raising the legal debt limit from the current 60 per cent of the GDP to 65 per cent or even 70 per cent.