Kuala Lumpur:BDO Malaysia has urged the government to streamline tax regulations and cut compliance costs in the upcoming Budget 2027 as a means to reduce business expenses.

According to BERNAMA News Agency, David Lai, executive director and head of tax advisory at BDO Malaysia, emphasized that clearer tax rules would provide businesses with more certainty and promote voluntary compliance without heavy fiscal burdens on the government. He stated that simplification of tax rules, rather than introducing new incentives, would significantly reduce the cost of doing business.

Lai also discussed the proposal to incorporate certain Goods and Services Tax (GST) features into the current Sales and Service Tax (SST) system. He suggested that the government should prioritize measures that minimize tax cascading and enhance traceability, instead of mirroring GST mechanics. Aligning sales and service tax regimes on various aspects and standardizing rates could help achieve this objective.

Regarding e-invoicing, Lai commented on the increase in the exemption threshold from RM1 million to RM3 million in turnover, acknowledging that high implementation costs could disproportionately affect micro, small, and medium enterprises. However, he cautioned against excessive exemptions that could weaken the system and stressed the need for reducing participation costs as a more effective solution.

Lai also addressed the complexities of the Stamp Act 1949, which he described as difficult to interpret. He advocated for clearer definitions and rules to avoid disputes, especially with the upcoming self-assessment system for stamp duty. This system requires taxpayers to accurately assess their stamp duty obligations, necessitating legislation that is comprehensible to non-professionals.

On the topic of capital gains tax (CGT) and real property gains tax (RPGT), Lai called for a review to prevent double taxation on property transactions involving property-owning companies. He suggested targeted CGT relief where gains have already been taxed under RPGT, noting recent amendments affecting the taxation of shares in property companies.

Lai's insights highlight the need for a balanced approach to taxation that supports business growth while maintaining government revenue.