IRB offers 15-20 pct reduction of late filing penalties

Deputy Finance Minister Datuk Chua Tee Yong said individuals or companies being audited and investigated for tax-related cases were also offered a reduction of penalties of between 25 and 35 percent through the initiative.

"The reduction and elimination of tax penalties offered by the Inland Revenue Board (IRB) through the initiative are aimed at collecting RM1 billion in taxes targeted for this year as well as reducing the tax gap in the country.

"It is also intended to create a win-win situation between the government and taxpayers, especially businesses in the strive to improve tax compliance," he told a news conference on the initiative to reduce and eliminate tax penalties on taxpayers here today.

The offers were in line with Budget 2016's measure to encourage taxpayers to make voluntary disclosure over late filing or non-filing of tax returns as well as to collect overdue taxes or tax arrears.

Chua said before the initiative, a penalty of between 45 and 100 percent would be imposed on taxpayers who did not provide correct income tax information, while a penalty of between 45 and 300 percent for failure to submit income tax returns.

For audit cases, the penalties are between 45 and 100 percent, he added.

Chua said since the hotline on the initiative was opened 10 days ago, the IRB received 200 calls and this augured well as it showed the people were interested to know about it.

He said four million taxpayers used e-Filing last year.

According to the World Bank and the International Monetary Fund, Malaysia has a tax gap of between 20 and 30 percent and this is considered high compared with between five and six percent among other countries.