Govt defends IRB’s aggressive approach

Govt defends IRB’s aggressive approach


The government will not intervene in the Inland Revenue Board’s (IRB) aggressive collection approach, despite calls by various parties for the tax agency to ease up in its relentless pursuit for higher revenues.

Second Finance Minister Datuk Seri Johari Abdul Ghani said the IRB already has the tax collecting structure in place and the government will not make changes to the approach.

Johari said the IRB’s strategy should not deemed as “aggressive” as the tax collector is trying to boost efficiency.

“The IRB has become more efficient in collecting tax from corporate companies and individuals. How can we regard that as aggressive?

“If one doesn’t pay tax and the authorities go after them, that can’t be regarded as aggressive,” he told The Malaysian Reserve when met at the Dewan Rakyat.

Despite the overzealous approach, Johari said the IRB had been lenient to individuals who were not able to settle income tax arrears due to acceptable factors.

However, the process had been streamlined and the necessary actions were taken on errant taxpayers.

“Previously, repeated written warnings were issued,” he said.

Lawmakers last week had expressed displeasure over the IRB’s methods, which were said to to be pushing the limits in order to meet its collection targets.

Bandar Kuching MP Chong Chieng Jen had likened the IRB’s tax collection style to “tax terrorism”. Seputeh MP Teresa Kok said the IRB should provide some leeway for deserving taxpayers to settle their arrears.

Kok had criticised the IRB for forcing taxpayers to settle arrears in one payment. Petaling Jaya Utara MP Tony Pua said there was widespread discontent against the IRB for their heavy-handed tactics to achieve higher tax revenues from individuals and businesses.

“Some have even termed IRB’s tactics as tax terrorism by demanding, with hardly any room for negotiation, back- dated taxes of up to 10 years,” Pua was reported as saying.

IRB CEO Datuk Seri Sabin Samitah

Sabin disagrees with claims that the aggressive tax collection approach could dampen business confidence and scare off investors (Pic by Muhd Amin Naharul/TMR)

IRB CEO Datuk Seri Sabin Samitah had previously told TMR that the agency was aware of its back-to-back tax collection efforts had put the business community on high alert as they felt “harassed” by the higher tax audits.

He also disagreed with claims that the aggressive tax collection approach could dampen business confidence and scare off investors.

“Conducting compliance and enforcement activities does not make any tax authority in the world aggressive. We are merely safeguarding the revenue of the country and providing fairness to compliant taxpayers.

“We will continue to work towards increasing the tax-compliant rate in the country, and for that, we will make compliance easy through our ongoing tax education and awareness programmes, while making non-compliance difficult by using full and legitimate force of the law,” Sabin had said.

Meanwhile, Johari said the personal income tax deductions announced in Budget 2018 would not reduced the IRB’s collection targets next year.

He said the economic growth and trade expansion would drive the IRB revenues.

The tax agency is expected to collect RM32.2 billion from individuals and RM72.5 from corporates next year.

The targets were higher than the RM30.1 billion individual income tax and RM67.5 billion for companies tax expected this year.

Finance Minister Datuk Seri Mohd Najib Razak had announced during the tabling of Budget 2018 last month that those who are earning between RM20,000 and RM70,000 annual taxable income will have their income tax reduced by 2% starting next year.