|The adoption of Big Data will improve the tax compliance and will generate much higher tax revenue for IRB / Photo by Wk1003mike via Shutterstock|
Taxes are one of the core elements of any country in the world, and people who evade them have become more of a problem as of late. This issue is present in different parts of the world, from the United States, to Europe and even Asia, but key features of big data could be the key to close in on tax evaders in Malaysia specifically, which has an estimated RM47 billion in this problem from 2015 to 2016. The Inland Revenue Board’s (IRB) adoption of big data technology is expected by experts to drastically improve tax compliance and to generate a much higher tax revenue for the entire country.
Verinderjeet Singh, the current chairman of Axcelasia Inc., has stated that the process of identifying the problematic taxpayers could be done much easier with the use of big data. Big Data could be used to find the appropriate amount of information from a large group of people, analyzing their expenses, and calculating where and if they pay their taxes on time. Verinderjeet, who is also a prominent member of the Tax Reform Committee of Malaysia, has stated that the problem of tax evasion in the country is ‘quite serious’ due to the sheer amount of people who under-declare their income and cause a lot of issues in the overall economy. Datuk Seri Sabin Samitah, the current chief executive officer of IRB, also stated, “Data analytics enables the IRB to collect more data about an individual or a company. This includes publicly available information on a person's spending, wealth, transactions and even lifestyle.”
This use of big data could improve not only the business of the IRB, but the economy of the very company. Although tax compliance in Malaysia is quite good, there are a lot of gaps that need to be filled to get the proper amount of revenue for the country. Amarjeet Singh, Malaysia tax leader and Sdn Bhd partner of Ernst & Young Tax Consultants, said, “The adoption of big data will help address these gaps.”