Company director gets RM2.4 million penalty for failure to file a tax return

Background

A recycling company director incurred a penalty of RM2,437,433 in addition to a fine of RM18,000 at the Magistrates Court here today, for her failure to file tax returns for the assessment years of 2021 and 2022 involving a taxable income of more than RM3.3 million.

She failed to file the returns for the taxable income of RM1,827,149 for the assessment year 2021 and RM1,558,176 for 2022, which meant she should have paid a tax of RM812,478 for both the years combined.

Law of Income Tax Act 1976

The taxpayer was charged under Section 77A(1) of the Income Tax Act 1967 which requires her to furnish a tax return in the prescribed form C for years of assessment 2021 to 2022 to the Director General of Inland Revenue.

Under section 112(1A) of the Income Tax Act 1967, the offense was punishable by a fine not exceeding RM20,000 or imprisonment up to six months or both, in addition to a special penalty of triple the tax payable, upon conviction.

Our Tips to Avoid Hefty Tax Penalty

First, get familiar with the tax rules that apply to you. The laws can change, so it's good to stay updated. You could use online resources, attend talks on tax, or hire a tax professional to help you.
Second, keep accurate records of your money - what you earn and what you spend. This is important when you're filling in your tax forms and it's helpful if tax officials need to check your details.
Third, always pay your taxes and submit your tax return on time. Late payments and late filing can lead to fines. You can set reminders or even automate payments and filing so you don't miss deadlines.
Fourth, find out about tax reductions and credits you can get. These can lower how much tax you need to pay.
Then, if taxes are too complicated for you, consider hiring a professional and responsible tax professional. They can guide you, help you save on your taxes, and avoid costly mistakes. Consider a tax lawyer when IRB brings you to court.
Lastly, take advantage of the Special Voluntary Disclosure Program 2.0 offered by the Ministry of Finance with a 0% penalty.

Source :

The Sundaily on 5/7/2023

https://www.thesundaily.my/local/company-director-gets-rm24m-penalty-for-failure-to-file-tax-returns
IRB Special Voluntary Disclosure Program 2.0

FAQ: https://www.hasil.gov.my/media/ijkbffcl/faq-svdp-20.pdf
Flowchart: https://www.hasil.gov.my/media/tkup4vap/flowchart-svdp-20-application.pdf

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