KUALA LUMPUR: The government has taken the initiative to create the tax identification number (TIN) and e-invoice to overcome revenue leakage and reduce the size of the shadow economy in Malaysia.
Deputy Minister of Finance I Datuk Seri Ahmad Maslan said the two methods are to replace the goods and services tax (GST).
“How do we reduce the size of the shadow economy? We do it by introducing e-invoice, as announced under Budget 2024.
“We know the implementation of GST can reduce 10 per cent of the shadow economy but we don’t think there will be GST this year or next year. There is no announcement yet,” he told reporters after launching the KOCEK Coin Exchange Service (KOCEK).
He said the implementation of e-invoicing is a new mechanism to improve the efficiency of the country’s tax administration and, in turn, enhance tax compliance.
Ahmad said from 2000 to 2009, the estimated size of the shadow economy was 30.2 per cent of gross domestic product (GDP).
However, he said for the period from 2010 to 2019, the size of the shadow economy has been reduced to 21.2 per cent due to the implementation of GST from 2015 to 2018.
Meanwhile, Pertama Digital Bhd has expanded its KOCEK service through a strategic partnership with Pos Malaysia Bhd, allowing KOCEK to offer its innovative coin exchange services at Pos Malaysia branches nationwide.
Pertama Digital initiated the innovative KOCEK service to stimulate the circulation of unused coins among Malaysians.
“The effort to create KOCEK is quite innovative and I hope KOCEK’s effort to exchange coins continues and becomes digital money,” Ahmad said.
He said the annual coins production by Bank Negara Malaysia for the period from 2019 to 2022 was 800 million pieces with an estimated cost of RM64 million per year.
He added that nearly 30 per cent or 240 million pieces of coins from the annual production did not return to circulation with an estimated cost of RM20 million per year being wasted.-Bernama
