IRB to address tax evasion loopholes (Updated)
KUALA LUMPUR: The Inland Revenue Board (IRB) will raise the level of awareness among taxpayers and boost compliance rate among them to achieve a collection target of RM134.7 billion this year.
It chief executive officer (CEO) Datuk Seri Sabin Samitah said that in 2017, tax collection rose by 8.15% compared with the previous year.
“This positive improvement clearly illustrates the overall strategy of 2017 has been well-planned and implemented to bring the desired impact and effect,” he told reporters at a meeting yesterday.
In addition to the strategy, he said, the main driver of this positive improvement was Malaysia’s encouraging economic growth last year.
“Income tax is the largest component of the country’s revenue, contributing around 50-55% annually, to finance the nation’s development policy and continuity of the people’s well-being.
“Therefore, the board will make every effort to plug loopholes so that taxpayers cannot escape from paying taxes and this will help improve the rate of compliance,” said Sabin.
According to Bernama, he said this year, IRB would target special sectors like banking, insurance and finance to ensure higher compliance rates.
“The tax leakage from the transfer pricing activities and the ‘underground economy’ practised by multinational companies will be our focus to ensure the ongoing strategy of ensuring their compliance is followed,” he said adding that the board would aggressively adopt the strategy to ensure compliance among companies involved in tax planning.
“Among the methods used by these aggressive taxpayers include mergers and acquisitions of companies and the manipulation of the Labuan Business Companies Act 1990.”
Sabin said the IRB has detected nearly 50 local and multinational companies operating in Labuan involved in tax evasion.
IRB deputy CEO (compliance) Abdul Manap Dim said the public must trust that the tax system and authority will be fair and transparent in its approach of hunting tax evaders especially the “big fish”.
According to theSun reporter, Karen Arukesamy, Abdul Manap noted that the tax authority was well aware of the issues concerning tax compliance and reiterated IRB’s focus on individuals and companies engaged in aggressive tax planning, manipulating accounts or involved in large repayments.