KPMG has called on the government to urgently implement proposed tax measures and legislations outlined in previous budgets and economic statements, in reaction to the 2024 midyear budget review.
The firm emphasized that timely action is essential to unlock the potential of these tax initiatives, which are vital for achieving the government’s target of a 20% tax revenue to Gross Domestic Product (GDP) ratio by the year 2027.
Despite the government’s efforts to pass new tax legislation, many of these laws remain operationalised due to the absence of necessary regulations or administrative guidelines. This delay has prevented the full realization of their intended impact on revenue generation.
Key legislative measures awaiting implementation include the amendment of the VAT Regulations 2017 (L.I. 2255), which aims to provide exemptions on active pharmaceutical inputs and finished products, significantly benefiting the healthcare sector. Additionally, the completion of the Regulations for the Exemptions Act, 2022, is designed to clarify and facilitate tax exemptions for various sectors.
There is also a pressing need for the development and completion of guidelines for the implementation of the Emissions Levy and Environmental Excise Duty, which are crucial for enforcing environmental taxes that promote sustainability.
It is in line with some of these issues that KPMG is urging the government to expedite the completion and rollout of these administrative guidelines, stressing the importance of a strong commitment to monitoring these guidelines and taking corrective actions as needed.
It is believed that by doing so, the government can optimize its revenue collection efforts and widen the tax base. Furthermore, KPMG also stressed the potential benefits of focusing on the digitalization of property tax administration. It is considered that by modernizing this aspect of tax collection, the government could significantly enhance its revenue growth prospects.
