Malaysian Companies Should Pay More Attention On Tax Risks
Recently, at a press briefing in Kuala Lumpur on Sept 13 in conjunction with the 32nd Deloitte KassimChan Tax Management Seminar, Deloitte’s managing director, Ronnie Lim offers some advices which should be well heeded:
- Malaysian companies should pay more attention to taxation issues as it could significantly affect a company’s bottom-line;
- Companies might end up paying significantly more for their ignorance on tax risks as the Inland Revenue Board (IRB) is getting more aggressive in tax collection;
- Companies that were ignorant of taxation issues could incur a 60% penalty on top of their corporate income taxes if they failed to make the accurate disclosure;
- Furthermore, IRB has a whole supply chain of whistle-blowers who could be competitors or disgruntled ex-employees;
- More than 90% of the companies audited by the IRB were found to be “tax-delinquent” in one way or another;
- To avoid incurring a penalty on tax error, companies and the public needs to be educated on tax rules and keep records of their business transactions for tax purposes;
- Many companies, especially small and medium-scaled enterprises did not have proper documentation hence will faced problems when dealing with tax officers who would be prejudiced when there’s no prompt response to their request for companies’ records.
IRB chief executive Tan Sri Zainol Abidin Rashid was reported as saying that its tax collections for 2006 to go up to as high as RM65 billion from RM58.8 billion last year.
The government has also announced the introduction of a tax audit and investigation framework, which outlines the rights and obligations of both IRB and taxpayers and bring about uniformity of tax treatment.
(Source: The Edge, Malaysia)
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September 22, 2006
Posted in: Taxation News
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