‘State fails when there is no revenue’
KUALA LUMPUR: The mentality of business operators and individuals must be changed to enhance tax collection.
Economists said unpaid taxes, especially those from underground economies, were affecting the country’s revenue.
Asli Centre of Public Policy Studies chairman Tan Sri Ramon Navaratnam said the extent of the underground economy, run by illegal businesses was not known, but its effects could be dire.
This came as a response to Prime Minister Datuk Seri Najib Razak who wanted the Inland Revenue Board (IRB) to tackle the flourishing underground economy.
“There is a big problem in creating awareness, cooperation, understanding and goodwill to pay taxes. Underground economies can lead to illegal activities, like drugs, smuggling and robbery, which will affect the government’s revenue.
“IRB should win the confidence of the people, instead of being selective or being ‘too kind’, he told the New Straits Times.
Ramon said underground businesses were thriving as a result of corruption and lack of enforcement.
“There must be a culture of integrity, accountability and transparency.
“When I was in the civil service 30 years ago, corruption was not a big issue.
“A lot depends on leadership and enforcement. If we don’t handle it well, it will be too late.
“A state fails when there is no revenue to run the country.”
Universiti Utara Malaysia’s School of Economics, Finance and Banking senior lecturer Dr Irwan Shah Zainal Abidin said, “An improvement in revenue collection will allow the country to invest more in projects which benefit the people, such as developing efficient transportation and a quality education system.”
“Besides that, an increase in revenue collection will assist the government’s fiscal consolidation agenda.
Irwan said combating underground activities was a way forward for the country.
Tan Sri Ramon Navaratnam