In Malaysia, ‘Shadow economy’ is estimated to be a fifth of the officially reported RM1.45 trillion gross domestic product (GDP) which is why the government is serious about tackling caused by the ‘shadow economy’.
Shadow economy in Malaysia is making up 21 per cent of our GDP.
Goods and services which are paid in cash are referred to as the Shadow Economy and it remained unreported for taxation.
Undeclared income from freelancing work, illicit activities like prostitution, sale of illegal drugs, smuggling of cigarettes and liquor as well as bribe-takings are also included in it.
Finance Minister Lim Guan Eng said the IRB has to make full use of Big Data Analytics to track down unpaid taxes in the shadow economy.
And added, “Under the 2020 Budget, the government is rationalising tax incentives, seeking to reduce tax leakage and improve on compliance via more effective auditing.”
source: www.nst.com.my
