THE Inland Revenue Board (IRB) is planning to include habitual tax evaders in the Central Credit Reference Information System (CCRIS).
A source told the New Straits Times that the board had been working on the plan since July and that the proposal had been submitted to Bank Negara Malaysia for approval.
“The IRB has a dedicated team in its legal department, which has been liasing with Bank Negara since they embarked on this plan four months ago.
“Bank Negara has asked IRB to provide a comprehensive proposal, specifically on the mechanism to identify tax evaders, before the central bank could give its green light,” the source said.
IRB chief executive officer Datuk Seri Sabin Samitah, who confirmed the proposal, said there were a few things that needed to be discussed before a decision could be made.
“Yes, we did suggest that habitual tax evaders be included in CCRIS.
“We also have to take into account many things, including public interest, as they may face difficulties in applying for loans if we included their names in CCRIS.
“At the moment, the tax arrears are manageable,” he told the NST.
The IRB was also planning to hold employers responsible and make them pay if they failed to deduct their employees’ taxes accurately, especially from foreign workers.
“We will make sure that employers carry out their responsibilities in deducting and declaring their workers’ taxes accurately to the board.
“The board has found that some employers, especially those who hire foreign workers and expatriates, have failed to deduct taxes from their workers’ salary before they returned to their home countries.
“In cases like these, we will claim it (tax) from the employers or those who sponsor them,” he said, adding that the IRB would continue to remind employers about the deductions.
It was reported previously that more than RM213 million in tax arrears had not been collected from expatriates who had left since 2012.
Sabin said next year, the board would impose a 100 per cent penalty charge on individuals or companies that habitually failed to pay their taxes.
“We have the Monthly Tax Deduction System for salaried employees.
“Our problem is with non-salaried employees, such as business operators.
“We will organise more programmes to educate them to make sure they have a full understanding of taxes.
“For habitual tax evaders, we will impose a 100 per cent penalty (based on the amount of tax) from 2018,” he added.
Tax evaders are currently slapped with a 45 per cent penalty. Section 104 of the Income Tax Act 1967 and Section 22 of the Real Property Gains Tax Act 1976 also allowed individuals who failed to settle their taxes to be barred from leaving the country.