Government Has Increased The Penalty For Tax Evaders To 100%

The penalty is currently set at 45%.

Cover image via MIMS

Bernama reported that tax dodgers will be imposed with a 100% penalty starting January 2018

Image via NST

In the report on 12 April, the Inland Revenue Board (IRB) informed that the penalty applies to both individuals and companies that dodge payments or file incorrect income tax returns.

"For instance, if the individual or the company commits a RM1 million tax evasion, they should pay a RM1 million penalty, that is 100% of the value of the tax," explained IRB chief executive officer Datuk Sabin Samitah.

Sabin said that this would be the maximum amount of penalty imposed. The penalty is currently at 45% of the value of the tax. This penalty will be imposed under the Income Tax Act 1967.

He made the announcement when speaking to reporters after the launch of 'Operasi Gegar Bersepadu' (G127B) yesterday.

Sabin hopes that this drastic move would create awareness on the importance of paying income tax among Malaysians

Image via Forbes

According to The Star, Sabin has urged tax defaulters to come forward and settle their penalties, but stressed that the penalty was not inclusive of the arrears which also has to be settled.

He also mentioned that IRB is lawfully allowed to impose penalties up to 300% on tax defaulters.

Defaulters have time till the end of 2017 to settle their arrears before the 100% penalty would be imposed in 2018.

Sabin also warned that the IRB has already taken action against government-linked companies (GLCs), multinational organisations, and small and medium enterprises so far

Through that, 10 companies have already settled their arrears that came up to more than RM800 million, with the current 45% penalty.

Sabin said that IRB will be looking into another 20 companies for their tax offences worth RM1.4 billion by the end of April.

He said that if these companies fail to pay up and the cases end up in the court, their names would be made public.

The Star reported that Operasi Gegar Bersepadu will see a number of actions being taken on tax defaulters including, audits, summonses, travel restrictions, and checks on employers who failed to make monthly tax deductions for their employees

Through the five-day operation from 10 till 14 April, the government aims to collect RM127.7 billion, in line with the tax collection target set by Putrajaya for the year 2017.

Here are the deadlines for filing income tax returns and payment of income tax for the year 2016:

There are three different deadlines for the submission of income tax return form (ITRF) and payment of Income Tax for Year of Assessment 2016:

1. E - Return form of employer (employers which are not companies: 31 March 2017

2. BE – Return Form of an individual (resident who does not carry on a business): 30 April 2017

3. B,P - Return Form of an Individual (Resident who carries on a business) and partnership: 30 June 2017

Note that you can submit your income tax returns form (ITRF) for the year of assessment 2016 via e-Filing starting 1 March.

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