ERRANT taxpayers have “cheated” the Inland Revenue Board (IRB) of about RM47 billion in the last two years alone.
They beat the national tax-collection system by under-declaring their taxable income or
simply not declaring it.
The IRB is, however, fighting back and plugging leakages that had allowed this to happen.
Those who had cheated the system would be made to pay for their indiscretions.
Those who had either been evading the taxmen or had been under-declaring their income could be looking at being slapped with a fine that is 100 per cent more than what they owed IRB.
Its chief executive officer, Datuk Sabin Samitah, said the new quantum of penalty would be imposed on those who failed to pay their taxes or had submitted fraudulent tax reports.
“For instance, if the individual or the company commits a
RM1 million tax evasion, they should pay a RM1 million penalty, that is 100 per cent of the value of the tax, as compared to the 45 per cent penalty currently imposed.
“The 100 per cent penalty can be imposed under the Income Tax Act 1967.
“The move to increase the penalty will not involve any new amendments of the law because it is already provisioned for under the Income Tax Act 1967.”
Sabin said the IRB was supposed to collect RM136.8 billion last year, but was RM22.8 billion short.
The year before (2015), errant taxpayers denied the IRB its RM145.2 billion target.
The RM121 billion it collected was RM24.2 billion off target.
The IRB chief said there had been a consistent 20 per cent tax gap in the country in recent years and he was determined to minimise it with the help of his counterparts in other agencies.
“So, just based on this figure, we should be collecting 20 per cent more.
“That’s why we launched operations to reduce the tax gap and increase the country’s revenue,” he told the New Straits Times yesterday.
Earlier, at a press a conference after launching Op Gegar Ber-
sepadu (G127B) here yesterday, Sabin said the decision was not a knee-jerk reaction as defaulters had been given two years to settle their arrears.
The operations, he said, were one of the many measures to be taken this year to address the issue.
“The operations will be a joint effort with the various government agencies, such as Bank Negara Malaysia and the Malaysian Anti-Corruption Commission, to ensure that tax leakages are prevented,” said Sabin.
He added that the government had also lost some RM1.4 billion following the failure of 20 companies to settle their taxes.
“The audit and tax investigations into these companies will be finalised by the end of the month.
“The companies will receive notices informing them of the deadline to pay up... If they fail to make the payment, we will bring the case to court and reveal their names.
“The companies involved include those from the telecommunications, agricultural, real estate and financial sectors,” he said, adding that 10 companies red-flagged by the IRB had paid up RM800 million in due taxes and penalties.
It is expected that some 4.5 million Malaysians would be paying their taxes by month-end, totalling about RM127 billion.
They include about three million individuals.
RM127b
targeted for 2017
4.5 million
expected to pay tax by the end of the month