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Wednesday, 22 January 2014

‘Final tax’ system not in effect yet

KUALA LUMPUR: Individual taxpayers will still have to file their personal tax returns with the Inland Revenue Board (IRB) as the new optional “final tax” system will only take effect in the coming assessment year.

IRB deputy chief operating officer Datuk Sabin Samitah said this meant that some 1.2 million individual taxpayers would have to file their returns before the April 30 deadline.

“Individual taxpayers are still required to file their income tax return form for the 2013 assessment year and can only opt for the final tax system in 2015 for the 2014 assessment year,” he told reporters after launching IRB and Malaysian Employers Federation’s (MEF) seminar on the new tax system.

He said IRB was embarking on a nationwide road show covering 14 cities and major towns to brief employers on the new tax system, where the monthly tax deduction for employees is deemed as final tax paid.

He said the new tax system would help IRB streamline tax collection operations while increasing revenue for the Government.

“The IRB managed to achieve a record collection for 2012 amounting to RM124.87bil, surpassing the collection of RM109.68bil in 2011.

“A target of RM140.148bil was set for the IRB for 2013 and the new tax system, when implemented, will help us improve collection in the future,” he added.

He clarified that the new tax system was optional and individual taxpayers were still allowed to submit their returns forms personally.

On a recent World Bank report that Malaysian taxpayers’ attitude had slipped down from 15th place to 36th place in 2013, Sabin said the report was not reflective of IRB’s record collection in recent years, which indicated positive changes in attitude.

“It is not reflective of Malaysian income taxpayers’ attitude as the report also took into account tax collection by other agencies such as the Customs Department and local councils,” he said.

It was announced under Budget 2014 that taxpayers who are employed may no longer need to file their personal tax returns from the 2014 year of assessment onwards.

Currently, employers are required to make monthly tax deductions from their employees’ income and remit them to the IRB.

The deductions take into account various forms of relief such as personal, spouse, child, EPF contributions and zakat payments through salary deductions.

The annual amount deducted is deemed the final tax paid by employees if they do not submit their income tax return forms.

Tags / Keywords: Government , inland revenue board , deputy chief operating officer Datuk Sabin Samitah , final tax paid


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