PricewaterhouseCoopers Taxation Services Sdn Bhd (PwC)’s partner Jagdev Singh said some people may look at the implementation of the initiative as trivial.

“If implemented correctly, the data obtained can ensure that each party pays the correct tax rate, then it is better than trying to introduce a new tax.

“If you look at it, tax revenues contribute almost 80% of government revenues, and yes, there is a lot of push and a need to diversify that revenue source,” he said.

Jagdev said there had been discussions from various parties that there has been reliance on oil and gas revenue, and at the same time, there is room to improve in terms of tax revenue.

“It is not just in the form of new taxes because taxes are difficult and painful. But it’s more in trying to create an ecosystem that reduces the leakages and the grey economy,” he said.

Jagdev said this during the “The Path Towards Greater Prosperity for Malaysia” symposium today.

On the goods and services tax (GST), Jagdev said if the government wishes to re-implement the tax system, the ideal reintroduction rate would be at 6%, the same as the rate implemented previously.

“Many people opined that the GST should be reintroduced at a lower rate, but then again, its (lower) rate is similar to giving subsidies.

“For example, if you go to a fast food restaurant, you will pay 3% GST. However, those who go to luxury restaurants will pay the same amount of tax (3%).

“As a result, it will just be like a subsidy. It is better for the government to collect 6% from all (rakyat), but for the B40 group, we can do a cash transfer. Like in Singapore, even though they are a developed country, they still implement this cash transfer method,” he added.