KUALA LUMPUR, April 17 — Under fire for a 100 per cent penalty on tax dodgers starting next year, the Inland Revenue Board (IRB) said today the drastic measure was a way to deal with taxpayers who are “hardcore tax law defaulters”.
Among those liable to be penalised starting January next year are repeat offenders, and those who still fail to comply with tax laws even after they have been audited or investigated before.
“The proposal to increase the rate of penalty to 100 per cent of the tax payable on the undeclared or under declared income beginning 1 January 2018 is a step towards elevating the level of voluntary compliance among taxpayers by dealing with taxpayers who are hardcore tax law defaulters,” its director-general Datuk Sabin Samitah said in a statement.
The IRB listed five instances where the penalty applies, including against those who refuse to give full co-operation during audit or probe, those who fail to give information or documents requested in audit, or participants of an organised tax evasion scheme.
“In preparation, taxpayers are encouraged to come forward and declare their income and correct information within the required time,” Sabin added.
IRB currently imposes a 45 per cent penalty on offenders.
The director-general of the IRB is empowered to impose such penalty under the Income Tax Act 1967.
In January, the IRB said it aims to collect RM127 billion in direct tax, a target of around 10 per cent of the national gross domestic product, this year.