IRB To Ease Penalties To Get Tax Evaders To Pay Up
Under a new guideline issued by the Inland Revenue Board (IRB), tax evaders who voluntarily disclose their income tax information correctly can expect to receive a reduced penalty of 15% of their outstanding tax arrears.
This offer is valid from 1 March until 15 December 2016, with taxpayers needing to declare their previous undeclared income and pay off the sum during the said period.
IRB said the offer could be extended depending on merit and compliance with the conditions laid out by the board. This will be on case-to-case basis.
Apart from voluntary disclosures, reduced penalties are also offered for cases of tax audits and investigations.
Audit cases need to pay a 25% penalty if full payment is made within 30 days from the notice of assessment. Those who opt to pay in six-month instalments will incur a 35% penalty.
Selected investigation cases will also merit a reduced penalty of between 25% and 35%, provided the Letter of Undertaking is signed by the taxpayer before 31 July 31 (for cases still under investigation as at 31 December 2015) and before December 15 (for investigations beginning 1 January 2016).
The guideline also includes reduced penalties on Real Property Gains Tax (RPGT), stamp duties and waiver of increases on tax arrears. Normal tax penalty was up to a staggering 300%.
The guideline is in line with the Government’s recent announcement during the Budget 2016 recalibration, that it would consider relaxing penalties to encourage taxpayers to settle their outstanding arrears promptly.
The Government will also double compliance and auditing efforts on tax evaders to enhance efficiency and increase tax collection. This is to encourage taxpayers to come forward and declare their previous income.
IRB has also deployed more audit officers to increase its tax audit coverage. This is to increase the number of audits, intensify audits and cover a large number of taxpayers.
IRB had a similar exercise last year, offering reduced penalties to tax evaders who came forward to settle their arrears between May and November.
The full guideline can be viewed on the IRB website. Taxpayers can also call the IRB customer service hotline at 1-800-88-5436 for information or clarification.
