Tax evaders face 100pc penalty

KUALA LUMPUR: Hardcore income tax defaulters will be slapped with a 100 per cent penalty effective January this year, said Inland Revenue Board (IRB) chief executive Datuk Seri Sabin Samitah.

This is more than double the previous 45 per cent penalty imposed on those who continue to evade payments or have submit inaccurate tax reports.

Sabin said the penalty was not drastic as the IRB would have already reminded the repeat offenders and given them two years to settle their arrears.

“We are committed to recovering 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 and Malaysian Association of Tax Accountants here yesterday.

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

NRRET, set up in 2015, also includes police, Malaysian AntiCorruption Commission, Bank Negara Malaysia, Customs Department and the Companies Commission of Malaysia.

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

Sabin said income tax was the largest component of the government’s revenue, contributing more than 50 per cent annually to fund the nation’s development policy.

IRB collected a total of RM123.33 billion last year, up 8.15 per cent, or RM9 billion, from 2016, and had targeted RM134.713 billion this year.

Of the 14 million employed adults, only 14 per cent pay income tax to the IRB.

He said defaulters and evaders were being unfair to compliant taxpayers who contributed to nation-building.