Have you filed your income tax returns?

Source: http://www.btimes.com.my/Current_News/BT/Wednesday/Corporate/20060425213355/Article/

Have you filed your income tax returns?

April 26 2006

AS ALL OF US should be aware, the filing deadline for income tax return forms is fixed under the self-assessment system as all of us have filed our personal tax returns last year for the first time under this system.There will be no extension of time to file your returns! So, the Form B and Form BE must be filed as follow:

Form BE (those without a business source) to be filed by 30 April 2006

Form B (those with a business source of income to be filed by 30 June 2006 i.e. sole proprietorship or partnership)

Just to recap, the following are the main aspects that we should know about under the self-assessment system:

Filing dates are fixed with no prospect of any extension.

The forms are designed so as to assist a taxpayer to be able to complete it easily (do you agree?).

The balance of the tax (i.e. as calculated by you less any payments/deductions made in 2005) has to be paid when filing the Form B/BE. You can pay it earlier at the payment counters, the Inland Revenue Board (IRB) or through selected banks if you wish you are advised to do that!

Self assessment applies i.e. there is no need to submit any documents with the forms except for dividend vouchers if there is a tax refund due to the dividends earned.

The forms are to be submitted to the processing centre at Pandan Indah (you should know where it is!) in Kuala Lumpur. You can mail it to the IRB in the self-addressed envelope that was sent with the tax return. If you wish to have proof of postage (just in case), then you will have to send it via registered mail, etc. Yes! You can go personally to Pandan Indah. However, like last year, there are drop boxes in the IRB branches for individual taxpayers to deposit their tax returns.

Tax audits may be carried out on selected taxpayers based on pre-determined criteria set by the IRB.

Penalties will be imposed if the IRB, through its tax audit process, determines that the taxpayer understated his/her tax liability.

WHAT SHOULD YOU DO?

Those who have received the forms should read the notes sent with the forms.

Get the guidebook issued by IRB (or download it from the IRB Website) which has detailed explanations on how to complete the form as well as worksheets which may need to be completed (if applicable).

Visit the branch where your file is maintained and seek assistance from the officers and obtain clarifications.

Consult a tax agent/consultant if you wish to obtain professional assistance

Go through the form and fill it in line with the explanations available, with a blue or black ball point pen.

Determine all the deductions, reliefs and rebates relevant to you.

Determine the tax liability.

Deduct the instalments paid in 2005 or deductions made in 2005 from your salary.

Prepare a cheque for the balance of tax due.

Submit the completed return and the cheque (where applicable) to the IRB.

Keep records of your income, expenses and claims for seven years.

There is no short-cut to completing the forms. We must devote some time reading it carefully. If you wish to avoid the rush, you can go to the IRB Website and try to file your returns electronically.

It appears to be easier now.

SOME THOUGHTS

The IRB has been giving talks on self-assessment and is willing to do so at the premises of employers for the benefit of employees. We should utilise this service as the level of knowledge is still very low.

Filing by way of e-filing is an option that has been made cheaper and thus more accessible to taxpayers (praise to the IRB for getting this done!) but a taxpayer still needs to visit/contact the IRB branch to get the special pin number for the digital certificate.

Why is this so? If the e-filing is so secure that we can send data on our earnings and tax, can it not be made secure enough for us to download our pin number? Having spent so much on the e-filing system, this should have been part of the deliverables of the consultants!

Not everyone has access to the Internet and even if they do, having to print out pages can be a chore.Why not continue to make available the guidebooks for taxpayers at the branches or allow taxpayers to collect it at the post offices instead?

Why cant the branches assist in collecting the tax returns from taxpayers as well as tax agents and then forward these to the Processing Centre in Pandan Indah? Such a service will be welcomed by all instead of forcing most taxpayers/tax agents to make a beeline to Pandan Indah (which is not that well equipped to handle such crowds!).

Filing electronically will not change this significantly as accessibility to computers and ignorance are real issues.

What about unresolved appeals against the earlier assessments? These need to be cleared quickly as the tax treatment of items will spill over and affect the current self-assessed returns.

What about the latest account balance of the taxpayers? Can they get this electronically instead of having to visit the IRB branch?

Will the big stick be used against individuals if errors were made in the returns? Will the IRB audit officers be solely driven by the revenue targets set by the IRB when reviewing a taxpayers case?

Self-assessment has its advantages but it requires commitment and dedication from all parties taxpayers, the IRB and agents.

Taxpayers have to make time to read through the pages of material available. They need to call up and visit the IRB branch there is no way out unless one wishes to engage a tax agent to assist in the matter.

The IRB has been trying to disseminate information through talks, seminars and awareness campaigns. The question does remain have all avenues of spreading the message been exhausted? Maybe not and therefore, the IRB must not be complacent and should continuously review and reassess existing processes and get assistance from trade bodies, etc. Changing behaviour is a continuous process.

So, happy form-filling and take care! Now, where is my form?

The writer is a tax observer and advocates effective governance, fair play and professionalism. He chairs CPA Australias Discussion Group on GST as well as the Research Committee. In addition, he is a Council Member of the MIA, MICPA and MIT and the managing director of VS ON TAX Sdn Bhd, a boutique tax consulting practice (http://www.vsontax.com ). He has authored many books and articles, the latest being Tax Thoughts on Todays Taxing times

This column is intended to discuss current issues on Malaysian taxation. The views expressed are the personal views of the writer gleaned from 25 years in the field of taxation…

CPA Australia has a worldwide membership of over 108,000 and is one of the worlds largest accounting bodies. CPA Australia can be contacted at my@cpaaustralia.com.au or visit [url=http://www.cpaaustralia.com.au]http://www.cpaaustralia.com.au

Filing by way of e-filing is an option that has been made cheaper and thus more accessible to taxpayers (praise to the IRB for getting this done!) but a taxpayer still needs to visit/contact the IRB branch to get the special pin number for the digital certificate.

Really? Take a look at this:

http://www.miricommunity.net/album_pic.php?pic_id=93

Malaysia Boleh! weeeeee! :smiley:

Right, the site works now and have successfully filed mine from home. But it took them more than 3 days just to manualy register my digital certificate serial number into their system to allow me to do anything online at all. For those intending to file it via online, make sure you have at least Adobe Reader v7 and Internet Explorer v5 - make sure that is set as the default browser because their pdf document is hardcoded to call upon it to perform the transaction. Malaysia Boleh? Boleh laa… :stuck_out_tongue:

MS certified people. Tsk.