In a statement issued today, BNSC deputy director Eric See-To outlined three possible scenarios that could lead to such a situation.
He said the first involved the increased profitability of companies, combined with rising income levels and the higher number of taxpayers.
Citing Tenaga Nasional Berhad as an example, See-To said the company’s profit before tax had increased from RM1.5 billion in 2009 to RM8.1 billion in 2016.
The pre-tax profits of Maybank meanwhile increased from RM1.7 billion to RM8.5 billion in the same period.
“The income levels of Malaysians also increased substantially during this period leading to higher tax collections,” he said, adding that this had resulted in more individuals becoming “honest taxpayers”.
The second scenario, See-To argued, was increased tax compliance.
More stringent enforcement and the implementation of the GST, he explained, had encouraged companies that had previously not registered with the Inland Revenue Board “to come clean and pay their fair share of taxes and report more truthful sales figures”.
“The last scenario is that income tax and corporate tax rates have increased.”
See-To’s statement today followed Rafizi Ramli’s claim in a live Facebook telecast yesterday, that income tax collection had grown disproportionately compared with the country’s economic growth since Prime Minister Najib Razak took office in 2009.
See-To also took issue with the Pandan MP’s decision to compare the tax collections in Malaysia in 2010 to Australia’s tax collection average growth of 5.3% during the same period.
Rafizi, he said, failed to state that the GDP growth of Australia was just 2.7% during that period, which meant that tax collections had also outpaced economic growth there.
“Australia’s example shows that income tax collections outpacing economic growth is not unusual.”
Last night, Rafizi, who is PKR vice president, said that from RM60.3 billion in 2010, income tax collection was estimated to have reached RM112.3 billion in 2017, according to data obtained from the Treasury.
He also said that the cumulative annual growth rate (CAGR) from 2010 to 2017 was 11%.
Rafizi further claimed that the rise in income tax collection was due to the IRB’s “aggressive audits” on businesses associated with Pakatan Harapan and their tendency to collect taxes from those who had deceased.