IRB proposes harsh penalty as way to deal with hardcore tax law defaulters

KUALA LUMPUR: The Inland Revenue Board of Malaysia ( IRB) is proposing to increase the rate of penalty to 100 per cent on tax payable on undeclared or under declared income beginning Jan 1 next year.

IR Bin a statement yesterday said the move was a step towards elevating the level of voluntary compliance among tax payers by dealing with those who are hardcore tax law defaulters.

“Some examples of cases which will be subjected to this rate are repeated offences of undeclared or incorrectly declared income received by way of a return form, refusal to give full cooperation during an audit or investigation process and failure to give information or documents requested to assist in an audit or investigation process,” it said.

The rate also applies to those carrying out an organised tax evasion scheme or in cases of failure to comply with the tax law even though the tax payer has been audited or investigated before.

“In preparation, tax payers are encouraged to come forward and declare their income and correct information within the required time,” it added.

Under the Income Tax Act 1967, the director- general of Inland Revenue is given the power to impose a penalty for the offence of default in declaring income or in declaring correct income which is subject to tax.