Noting that the government collected RM145.08 billion from direct taxes last year, Guan Eng said that the sum was almost 6% – or RM8 billion – more than the amount collected in 2018.

“Last year’s sum was a new record for the country, bettering the previous record of around RM137 billion set in 2018,” he said during the sidelines of the Inland Revenue Board’s ‘meet the customer’ event today.

“Apart from showcasing effective leadership, the increase in taxes also showed that the economy is growing well,” he added.

Lim said that LHDN would continue to implement efficient tax laws to improve the effectiveness of the agency’s enforcement activities in dealing with the shadow economy, which was at around 20% of Malaysia’s gross domestic product (GDP).

With the shadow economy in developed nations and developing nations set at around 5% and 12% respectively, the minister said the issue was one his officers were fully aware of.

“20% is very high,” he said. “When we talk about shadow economy, we’re talking about corruption, smuggling, that kind of unreported income.

“We had to fill up a RM150 billion hole from the previous government. You can imagine that when you have leadership by example, and they see the ones at the top taking, the others will follow suit. So this is something we have to address.”