Tax corporate governance framework helps taxpayers, corporates manage risks

KUALA LUMPUR: The imminent Tax Corporate Governance Framework (TCGF) to be implemented in Malaysia will enable taxpayers and corporations conform to tax requirements and manage tax risks through early identification and resolution.

Ernst & Young Malaysia Tax Leader, Farah Rosley, said the framework not only will promote good governance, but provide a level of comfort to the relevant stakeholders that risk is maintained at an acceptable level.

“Good tax corporate governance allow businesses and corporations manage their risks and plan more effective tax management,“ she told Bernama in an exclusive interview, recently.

TCGF to be implemented soon in Malaysia, will act as a means for Inland Revenue Board (IRB) and taxpayers to develop and maintain a more transparent working relationship in ensuring that the tax compliance process is fair and effective.

It will set out techniques and processes within an organisation to identify and assess tax risks, and prescribe appropriate actions to mitigate the impact of those tax risks.

Farah, who is a strong proponent of TCGF, said having good tax corporate governance, would enable businesses to actually manage from the risk side so that they could identify in which areas they have under declared taxes besides ensuring they buy assets conforming to the tax requirements.

“TCGF ensures there is a proper protocol and proper policy of amount subjected to tax and this will mitigate risk areas,“ she said, adding that countries like Singapore and Australia has been successful in implementing the TCGF.

Farah, who is the current President of the Chartered Tax Institute of Malaysia (CTIM) said the TCGF falls squarely within the environmental, social and governance (ESG) practice which assures sustainability.

“When you pay taxes, you are serving dues and contributing back to the society, besides providing sustainability for the development of the country,“ said Farah, who has more than 20 years of professional experience in the field of taxation. – Bernama