Income tax collection is key to Malaysia's development 

April 17, 2018 | By | Reply More

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KUALA LUMPUR: The Inland Revenue Board (IRB) chief executive Datuk Seri Sabin Samitah has confirmed that effective January 2018, recalcitrant income tax defaulters are slapped with a 100 per cent penalty.

This is more than double of the previous 45 per cent penalty on those who fail to pay their taxes or have submitted inaccurate tax report.

Sabin explained that this penalty is not drastic as the IRB would have already reminded these repeated offenders and given them two years to settle their arrears.

“We are committed to recover income tax arrears from individuals and corporate bodies, illegal outflow of funds and acts of corruption,” he said at the opening of the Malaysian Tax Conference 2018, organised by the Malaysian Institute of Accountants (MIA) and Malaysian Association of Tax Accountants (MATA), here today.

Sabin said rigorous auditing and investigations are being carried out by the IRB and the Attorney-General Chamber’s high-powered National Revenue Recovery Enforcement Team (NRRET).

The NRRET, set up in 2015, also include the police, Malaysian Anti-Corruption Commission, Bank Negara Malaysia, Customs Department and the Companies Commission of Malaysia, among others.

“We are collaborating with other government agencies to update our database,” he added.

Sabin said income tax is the largest component of the government’s revenue, contributing more than 50 per cent annually, to fund the nation’s development policy and continuity of the people’s well-being.

“Apart from construction of roads, hospitals, schools, the procurement of military assets for Malaysia’s security, tax revenue also goes to redistribute income via the 1Malaysia People’s Aid (BR1M).

“My team strive to make it more convenient for income taxpayers who consistently execute their responsibility. We aim to raise awareness that income tax collection is key to our country’s development. We aim to expand voluntary compliance and reduce tax leakages,” he said.

Currently, out of the 14 million employed adults in Malaysia, only 14 per cent pay income tax to the IRB.

He explained that tax defaulters and evaders are being unfair to compliant taxpayers who responsibly contribute to the nation’s building.

“We must make every effort to plug loopholes so that eligible taxpayers cannot escape their responsibilities,” he added.

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