Taxman to hunt down evaders after Sept 30

Penang Chinese Chambers of Commerce convenor Finn Choong posing questions to an Inland Revenue Board panel led by Finance Minister Lim Guan Eng at the chamber’s headquarters in Light Street here today.

GEORGE TOWN: The federal government is not likely to extend its Sept 30 deadline for Malaysians to voluntarily declare previously undeclared incomes, Finance Minister Lim Guan Eng said today.

He told a forum here that the Special Voluntary Disclosure Programme by the Inland Revenue Board had already been extended once before and another extension would defeat the purpose.

The deadline was initially set at June 30, but was extended in April to Sept 30.

“Even if we were to extend, we have to go through the Cabinet. I feel if we extend it again, it would make the whole thing meaningless,” he said.

He urged Malaysians to take up the offer, which provides low penalties for those voluntarily disclosing previous income which had not been declared.

IRB CEO Sabin Samitah showing voluntary disclosure programmes in other developed countries. He was at a forum at the Penang Chinese Chambers of Commerce in George Town today.

“This ‘discount’ is one of a kind,” he said. “You do not believe me, you can ask (former PM) Najib Razak,” Lim said in a jibe at the former premier, who has been asked to pay RM1.6 billion in taxes due on assessed income of RM4 billion.

Speaking at a forum on the voluntary disclosure programme, hosted by the Penang Chinese Chambers of Commerce, Lim said the Inland Revenue would not go to homes of tax debtors by “toting AK-47s and wearing balaclavas” like the previous government, but would use a soft approach to get people to pay up.

He said those who wished to declare now should not be seen as tax evaders but as those who had overlooked or forgotten to have declared before.

“You declare through SVDP now, we will issue you a ‘clearance letter’ up to 2017. This means you do not need to worry about looking for old receipts, you are clear up to 2017 like Line Clear Nasi Kandar,” he said to laughter from the audience of about 100 people.

“But this does not mean if you settle your taxes, you are immune to other laws. If that is the case (fugitive financier) Jho Low can come back and escape from other charges,” Lim added.

IRB CEO Sabin Samitah speaking to participants of the forum on the Special Voluntary Disclosure Programme (SVDP) at the Penang Chinese Chambers of Commerce in George Town, Penang today.

Inland Revenue Board chief executive Sabin Samitah said after Sept 30, its team of investigators would start “risk analyses” and would begin to hunt those who had owed the government in income taxes.

“We will catch you after September. We have big data and let me tell you now, it is damn good. We know everything.

“Those who declare, we will accept your declarations in good faith. To those who made excess claims, teachers making money through home tuition, part-time work but have never declared, take this opportunity,” he said.

Sabin said the easiest to detect are online businesses, as all their transactions are made through online banking and have a clear-cut paper trail for the IRB to make a case.

He said a “clearance letter” would be given to taxpayers who took up the SVDP up to 2017 for individual taxpayers and year-ending March 30, 2018, for companies.

“For simple cases, we will give you the clearance letter in three days. You will not kena audit again,” he said.

Lim interjected, saying if a taxpayer has a case open on him in 2017 and 2018 and yet to be closed, then the SVDP will not render its previous cases closed.

“It also depends on the date of the previous investigations. And also, if a whistleblower comes up and says you are hiding money overseas, this disclosure programme cannot save you, he said.

Sabin said if one were to declare their offshore accounts, the IRB would not ask for the money, but merely ask a few questions, such as how much was first deposited and how it came up to the current amount.

“Say if you disclose RM100million is parked in an account in Singapore, we are not going to go there and take our money,” he said.

The SVDP allows those who had deliberately or inadvertently under-declared their incomes to pay lower penalties compared to the usual 45% to 300%.

Those who report by Sept 30 under the programme would only have to pay 15% penalties on their undeclared income. Those who did so before June 30 were offered 10% in penalties.

A member of the Penang Chinese Chambers of Commerce asks questions regarding the Inland Revenue Board’s Special Voluntary Disclosure Programme.

SVDP was introduced in the 2019 Budget and offered to individual, companies and organisations who are registered taxpayers, and also those who had never been registered before.

IRB collected RM137 billion from income taxes in 2018. This year, it aims to collect RM147 billion, it was reported.

If one opts for the SVDP, no auditing or investigation will be carried in the future.

The IRB expects to bring in around RM10 billion to RM20 billion to the tax coffers, it was previously reported.

The Inland Revenue Board’s FAQ on the programme is at
http://lampiran1.hasil.gov.my/pdf/pdfam/FAQ_VD_BI_09052019.pdf