KUCHING: Whether the Special Voluntary Disclosure Programme (SVDP) has come to fruition or the other way around, taxpayers’ response is seen as jittery.
Somehow, the lackadaisical attitude shown by taxpayers seem to portray the lack of trust in the government.
Although the measure could not restore the country’s economy back to its glory, Deloitte Tax Services Sdn Bhd director Phillip Lim, when interviewed by New Sarawak Tribune yesterday at the Taxmax 45th Series Seminar here, said that it was quite effective to some extent as it had raised public awareness on the tax collection issue.
In driving home his point, Lim said, perhaps what taxpayers were concerned about was the government transparency in indicating the expenditure flow of the tax revenue.
“Both parties (taxpayers and government) need to be transparent. In my view, to build mutual trust between both parties, the government must clarify on how this tax revenue will be spent.
“Taxpayers are concerned about how and where the government would be spending the tax revenue. For them, paying tax is a social duty in which the collection of the tax must be utilised for community development, for example, to build and upgrade dilapidated schools,” he explained.
“Taxpayers too must be transparent when disclosing gross income,” he added.
It is no surprise that tax collection remains one of the major issues in Malaysia.
Striving for rapid development amid a slow global economy, the SVDP programme, which was introduced by the Finance Ministry (MOF) during the tabling of the 2019 Budget, is to coax tax defaulters to voluntarily declare unreported income.
However, the SVDP is not tantamount to a tax amnesty programme.
Lim said the good news about SVDP was that defaulters would not be immediately slapped with the heavy penalty rate of between 45 percent and 300 percent as initially announced.
The surrender period, which ended Sept 30 this year, promised tax defaulters to receive a low penalty rate of 10 percent to 15 percent.
It was noted that the MOF was gearing up efforts to hunt down defaulters, especially those involved in illegal and shadow economy, said Lim.
Urging defaulters to quickly declare their unreported income, he warned taxpayers who missed the Sept 30 deadline that the penalty would definitely be higher than the amount during the SVDP period.
“Those who have yet to declare, I urge them to come forward and voluntary disclose their unpaid taxes.
“They can still make voluntary disclosures at any time via tax agencies or directly contact the Inland Revenue Board (IRB) as long as audits or investigations on their files have yet to commence.
“The penalty tax rate will be between 35 percent and 40 percent depending on the severity of the evasion,” he explained.
When asked about failure to prove source of income, he pointed out this would involve IRB and agencies conducting necessary enforcement activities with other related government enforcement agencies.
“Failure to prove the source of the income may resort in individuals being cross-checked by IRB and MACC,” he reminded.
Lim reckoned that the selection of the defaulters was based on risk analysis.
“After the end of this programme, it will impose a minimum penalty rate of 45 percent and up to a maximum of 300 percent as stipulated under the Income Tax Act 1967,” Lim warned.
In mid-September, Finance Minister Lim Guan Eng had asserted that there would be no more extensions after the Sept 30 deadline.
For more information, the public can visit the nearest IRB branch, call the IRB Care Line at 1-800-88-5436/ 603-7713 6666 (overseas calls) or email pengakuansukarela@hasil.gov.my.
