IRB can track undeclared offshore accounts for taxation

The details of foreign bank accounts are accessible under the OECD’s AEOI system, says deputy finance minister

pic by TMR

THE Inland Revenue Board (IRB) has the ability to trace undeclared earnings held in offshore accounts for those who fail to disclose their taxable overseas assets via its Special Voluntary Disclosure Programme (SVDP).

Deputy Finance Minister Datuk Amiruddin Hamzah said the details of foreign bank accounts are accessible under the Organisation for Economic Cooperation and Development’s Automatic Exchange of Information (AEOI) system.

“The IRB has this information. If there are reasons to believe that an individual has not declared their income in full, we can use this information to approach them and make sure that what is due to the country is paid in the best manner possible,” he told the Dewan Rakyat yesterday.

Amiruddin said this in response to a supplementary question from Awang Hashim (PAS-Pendang), who wanted to know if the AEOI system could detect defaulters who have performed illegal transactions in the black economy.

“I hope the SVDP will encourage them to voluntarily declare all taxable assets with an open heart as the current penalty rate is very reasonable. In the end, this will be used to benefit all Malaysians,” he added.

A total of 486,360 taxpayers have voluntarily revealed their undeclared income to the government as of June 23.

Amiruddin said the government will announce the total tax collection under the SVDP by the end of this year.

Earlier in April, Finance Minister Lim Guan Eng said the Cabinet had agreed to extend the voluntary programme until Sept 30 this year.

According to Lim, a total of 381,979 taxpayers had voluntarily disclosed their undeclared income to the agency as of March 31.

It was reported that the IRB had collected a total of RM206 million from companies and individuals via the SVDP between November 2018 and January 2019.

Its CEO Datuk Seri Sabin Samitah  (picture) said the IRB is expected to collect up to RM10 billion from one million taxpayers via the programme.

Without the SVDP, penalty against undeclared income can go up to 300%.

The penalty rate was reduced to a minimal 10% for declarations made before June 30.

For filings made between July 1 and Sept 30, 2019, the penalty fee has been set at 15%. Individuals and companies who participate in the programme will also be exempted from any audits or investigations.

For declarations made after Sept 30, taxpayers will be penalised with rates ranging between 45% and a maximum of 300%, as stipulated under existing tax laws.