IRB, Customs may merge to weed out tax evaders

IRB,-Customs-Department,-GST,-lhdn,-inland-revenue-boar,-ssm,-companies-commissionPETALING JAYA: Thanks to the implementation of the GST since April last year, and the active enforcement by the Customs Department, the government has now discovered tens of thousands of businesses which have never filed nor paid any income tax.

This has also alerted Putrajaya to discrepancies involving different information being submitted to the different collection agencies, namely Customs and the Inland Revenue Board (LHDN).

As a result of this development, the government is now said to be mulling merging the two agencies into a single tax and revenue collection body, The Malaysian Reserve (TMR) reported today.

A mechanism was already being worked out by Putrajaya to exchange tax information on companies between the LHDN, Customs and the Companies Commission of Malaysia (SSM), and the discovery of the discrepancies has now pushed the merger idea further, sources told the financial daily.

“The tax information agreement could lead to a merger of the IRB and the Customs department. In the long term, this would be another way of looking at (addressing tax collection issues),”the source was quoted as saying by TMR.

It has been previously reported that Malaysia loses billions in tax revenue every year, mainly due to black market imports, among other reasons.

So, the mechanism for intelligence sharing among departments and ministries is designed to plug loopholes in the tax collection system after the GST was introduced in April last year.

Earlier this year Bernama reported that the Customs Department – which is the collection agency for the GST – launched an operation to track down companies with a minimum monthly profit of RM500,000, but did not register for the GST.

The ongoing enforcement operation by Customs will also target companies which have registered but did not submit their invoices to the Customs Department.