A minor mistake in tax submission may end up with big repercussions, finance bill expected to take effect next year LL Kong: Opportunities should be given to businesses which make genuine mistakes

By Su Zheng Yi
Nanyang Siang Pau, Front page, 13 November 2015

(Kuala Lumpur 12 November 2015) Tax experts discover that in the recent Finance Bill tabled by the government in parliament, a minor error in tax submission may be fined a minimum RM200 and a maximum of RM20,000, or a maximum jail term of six months or both.

Tax experts point out that the penalty clauses are hidden in the bill.

Nevertheless they are of the view that the government should not penalize “small mistakes” but to go after tax defaulters who intentionally deceive the government.

“Rich man’s tax” is included as new clause

In the budget tabled by Prime Minister Datuk Seri Najib Tun Razak last month, “rich man’s tax” received most attention. Accounting professionals discovered that new clauses included in the Finance Bill for “minor errors”. Once the bill is passed in parliament, it will take effect in January.

According to Finance Bill tabled by Deputy Finance Minister Datuk Chua Tee Yong for first reading on 27 October, the government proposes to have an additional clause of (o) in the existing clause of 120 (1) that anyone who does not furnish accurate information to Inland Revenue Board director-general under Clause 77 (4) (b) or Clause 77a (3) (b), he is liable to a minimum fine of RM200 to a maximum fine of RM20,000, or half year’s jail or both. ‘

Clause 77 elaborates on submission of personal income tax while 77A on corporate, trust and co-operatives. Hence, the amendment does not only affect tax submission of corporations but also individual tax payers.

Different business codes are to be updated instantly

L.L. Kong, head of tax division under the Associated Chinese Chamber of Commerce and Industry Malaysia (ACCCIM) said when asked what are the errors liable to fine, Finance Ministry replied that minor mistake such as business codes.

When asked by Nanyang Siang Pau what if the business owner has several types in businesses in different sectors and how to ensure that the submission of business code is correct, the reply is “submit the main business”.

“Main business? It can be this sector in this year but another one next few years.”

No errors allowed for basic details

He also reminds businesses that based on the latest amendments, basic details like company’s registration number, address, information of directors are not supposed to have any errors.

Kong is of the view that the government should not penalize innocent tax payers who committed genuine mistakes but to penalize those who are intentionally deceiving the government.

“These errors would not cause the government suffers in terms of tax revenue unless they are out to deceive.”

He says according to existing law, under self-assessment scheme, only those businesses which intentionally deceive would be fined.

The Malaysian Institute of Accountants has met up with Deputy Finance Minister Datuk Chua Tee Yong over the matter. He would be bringing the matter up with Finance Ministry for discussion.
The ministry would be making final decision.

Original Source:
财政法案藏刀‧计划明年生效 报税小错后果大
孔令龙： 商家非蓄意犯错， 就应给予改过机会。