Addressing some taxing issues

WE would like to respond to a letter that appeared on June 17 in the Views column of this newspaper titled “Issues with schedular tax deductions” (online at bit.ly/ star_taxes).

The Inland Revenue Board of Malaysia (IRB) would like to address the writer, Honest Taxpayer, of Petaling Jaya about his/her issues.

Under the self-assessment system, the taxpayer is responsible for computing his/her own chargeable income and for keeping records and documents for seven years from the end of the year in which the income tax form is filed.

Tax audits will be carried out by the IRB to ascertain that the tax reported is correct and we may ask the taxpayer to produce documents to support claims. More information on record keeping can be found at Public Ruling 5/2000 at our website, hasil.gov. my.

For the purpose of a tax audit, a PCB (potongan cukai berjadual or schedular tax deduction) receipt is not required as the EC form (statement of remuneration from employment – public sector) is sufficient evidence of the amount remitted by the employer to the IRB. In some refund cases, however, when the amount remitted differs from the amount reported in the income tax form, IRB will issue Form PCB 2 (II) to be filled up by the employer to verify details of the amount of PCB paid.

With effect from Jan 1, 2014, the time period within which an assessment can be raised is five years after the end of the relevant year of assessment. However, if the case appears to have any elements of fraud, willful default or negligence, the five-year time bar does not apply and assessment can be carried out at any time for any year of assessment.

We wish to express our regret for the inconvenience encountered by the letter writer and encourage him/her to approach us for better solutions. We hope to serve him/her better in the future.