Lower penalties for true disclosure

PETALING JAYA: Tax evaders who voluntarily disclose their income tax information correctly can expect to receive a reduced penalty of as low as 15% of their outstanding tax arrears, under a new guideline issued by the Inland Revenue Board (IRB).

The guideline, which was released yesterday, is in line with the Government’s recent announcement that it would consider relaxing penalties to encourage taxpayers to settle their outstanding arrears promptly.

The offer will be valid from March 1 until Dec 15 this year, with taxpayers needing to declare their previous incomes and pay off the sum during that period.

IRB customer care officer Masrun Maslim said the offer would be extended on a case-by-case basis, depending on merit and compliance with the conditions laid out by the board.

Apart from voluntary disclosures, reduced penalties are also offered for cases of tax audits and investigations.

For audit cases, those who meet the requirements listed in the guideline need only pay a 25% penalty if full payment is made within 30 days from the notice of assessment. Those who opt to pay in six-month instalments will incur a 35% penalty.

Selected investigation cases will also merit a reduced penalty of between 25% and 35%, provided the Letter of Undertaking is signed by the taxpayer before July 31 (for cases still under investigation as at Dec 31, 2015) and before Dec 15 (for investigations beginning Jan 1, 2016).

The guideline also includes reduced penalties on Real Property Gains Tax (RPGT), stamp duties, as well as a waiver of increases on tax arrears for selected groups.

On Wednesday, The Star reported on the IRB’s move to ease penalties for tax evaders who voluntarily step forward and a waiver of tax increases for early settlement of arrears.

The IRB had a similar exercise last year, offering reduced penalties to tax evaders who settled their arrears between May and Nov 30.

The full guideline can be viewed on the IRB website at www.hasil.gov.my. Taxpayers can also call the IRB customer service hotline at 1-800-88-5436.