THE Inland Revenue Board (IRB) is certainly sharpening its sensor to clamp down on some 100 prominent figures who are both ‘ultra high net worth individuals’ (UHNWI) yet are possible tax evaders, too.
This comes about as the tax collecting agency has heeded the recent call by Prime Minister (PM) Datuk Seri Anwar Ibrahim to go after the rich who evade taxes, according to its head honcho Datuk Mohd Nizom Sairi.
Besides prominent figures, IRB is also training its gun on those in the T20 (Top 20%) income bracket to see if they have been complying with tax laws.
“We don’t want to send a message that it is not good to be rich because you will be targeted. “This is not the message of the Prime Minister. His message is that if you are supposed to pay taxes, you must pay,” Mohd Nizom who was made IRB’s CEO on Oct 18, 2021 told The Star.
During his address on March 6 to mark LHDN’s 27th anniversary, Anwar who is also the Finance Minister encouraged IRB to find ways to hunt down tax evaders even if they are his friends or supporters.
The PM said he wants these individuals – regardless if they are petty traders or the wealthy – to abide by the law and not evade paying income tax.
He went on to recall the time when he held the finance minister portfolio in the 1990s when it was difficult to collect taxes, especially from public figures, including VVIPs, who refused to pay taxes.
On June 14 last year, IRB said it has traced around 31,598 entities comprising individuals, businesses, companies and others who have yet to declare their incomes, culminating in the government incurring tax losses estimated at more than RM665 mil.
The entities were identified based on asset ownership as well as their ability to secure financing and/or security valued at RM500,000 and above.
The IRB further advised the 31,598 entities, in particular 23,751 individuals, to voluntarily appear at their nearest IRB branches to register their income tax files and declare their income.
Without divulging further details, Mohd Nizom also said that LHDN has a division which gathers information with regard to tax matters on a day-to-day basis.
“We have a dedicated division which is tasked with getting information from every possible or available source,” he further told The Star. “This can be from public information or from other parties through legal means.”
He said that there are two possible outcomes once the data gathered is fed through the Tax Audit Compliance System and further scrutinised and analysed by experts.
One of the follow-up actions would be carrying out an audit on individuals or companies including requesting further information on tax compliance.
“If we have enough information from several sources and are convinced that we have enough information to satisfy our suspicions, we will open an investigation paper,” he asserted.
The violations include undeclared taxes and undeclared second income as well as under-declaring income.
Mohd Nizom also cautioned that IRB is empowered to prosecute offenders without the need to refer the matter to the Attorney-General’s Chambers (AGC). “This makes the LHDN prosecution process faster but not any easier,” he added.
For the record, IRB has created history with the highest direct tax collection of RM175.4 bil or a 21.75% jump in 2022 compared from its 2021 collection.
In 2023, it expects as much as RM174.1 bil to be collected based on the performance of the current economic environment. – April 21, 2023
