In an effort to boost revenue for the country, the Inland Revenue Board is offering a special tax amnesty called the Special Programme for Voluntary Disclosure. This measurement was also announced in the recent Budget 2019.
The idea is to encourage people to make a voluntary disclosure of undeclared taxable income in return for some benefits.
Voluntary Disclosure Benefits include
Low tax penalty rates
Income declared through this programme would not be reviewed further
No prosecution for tax evasion
Reduced penalty rates
Under this programme, taxpayers who voluntary disclose their undeclared income and settle their underpaid tax by the following deadlines would be given a very low penalty. The disclosure periods and corresponding penalty rates are as follows:
The penalty rates will increase significantly after the programme ends on 30 June 2019, ranging from 80% to a maximum of 300% of the tax payable.
Should I disclose?
IRB may introduce new measurements to catch tax evaders after this period. This include more aggressive tax audits to be carried out and the possible introduction of Unexplained Wealth Laws* in Malaysia.
*The legislation may allow the court to order a person under question to reveal his unexplained wealth, failing which it would be an offence
punishable by fines and/or imprisonment.
IRB knows what you have locally and abroad
The tax department has invested heavily into data mining, and with the already implemented automatic exchange of information (AEOI) and Common Reporting Standard (CRS) with tax authorities from all around the globe, it is very well informed of what everyone owns locally and abroad.
Instalment plans available
Taxpayers are encouraged to grab this opportunity to come clean. And for those who cannot settle the tax before the deadline, they may request for an instalment plan (IRB would charge a small interest on the unpaid amount).
This is important – we are here to help
We are already receiving enquiries from clients and the public on how to approach this voluntary disclosure programme. You are welcome to speak to us. All discussions are private and will be treated with strict confidentiality.
If your accounts are a mess or your have some undeclared income, please get in touch with our experienced tax accountants. We are familiar with tax rules and we could assist you in ascertaining the income to be declared and how to approach the disclosure safely, at an affordable fee.
Let’s talk: Please also speak to us if you are thinking of taking advantage of the voluntary disclosure programme.
Every effort has been made to provide accurate information. However, the information and regulations contained in this article are subject to changes and amendments by the relevant authority at any time. As such, the information in this article may not be current.
And the information provided in this article is general commentary only and shall not be considered as advice or recommendation. As all tax situations are specific to their facts and will differ from the situations in this article - if you have specific tax questions you should consult a licensed tax agent.