Monday 1 August 2011

Penalty on Late Filing of Tax Returns

Further to our e-CTIM No. 29/2011, the President has sent an email to the Deputy Director General (Tax Operations), Encik Mohammad Sait on 27 July  2011. Below is the full text of the email.
Dear Encik Mohammad
Thanks for your quick reply. We have noted the IRBM's response raised through Desire. Our main concerns are 2 fold:
a) the steep increase in penalty rates and
b) it came also as a surprise to many tax agents and taxpayers as there was little warning or advance notice given.
Section 112 ( 1) ...imposes a penalty even on conviction only a fine between RM 200 and RM 2,000 and in the past, we guess the rationale for the penalty under section 112(3) is based on the same range as that provided in Section 112(1). We sincerely hope IRBM will reconsider reducing the current penalty rate of 20% to 35 %, to a lower rate and to apply this rate on a prospective basis after adequate notice is given to the taxpayers. Tax agents and taxpayers have also been caught by surprise because the new penalty rates were not known to the public.
In addition, many of our members and those employed in the private sector have come under tremendous pressure from clients / employers for providing information on penalties based on the IRB's previous practice of imposing a penalty for late filing of between RM 200 and RM 2000 under Section 112(3).
We trust that you will consider the above points when reviewing our appeal above.
Regards
SM. Thanneermalai
President
The President and the Chairman of Technical and Public Practice Committee have been pursuing this matter closely and the Institute will continue to engage the authorities, taking into consideration the concern and interest of members.

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