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The Management Of Company Civil Suit

The Management Of Company Civil Suit

KLEPTOCRAZY SCORECARD

The Management Of Company Civil Suit

Financial Loss

Importance of Project

Summary:
Companies tax arrears for the year 2014, companies tax arrears is RM4.365 billion (53.08%) out of RM8.224 billion. Evaluations conducted in 3 IRBM‟s branches found that the management of civil suit was less satisfactory.

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PROBLEMATIC

User Rating: 4.5 (2 votes)

Civil Suit taken by Inland Revenue Board of Malaysia (IRBM) towards companies is to ensure the judgment/command has been made for the companies to pay tax arrears when normal procedure to collect tax failed. Companies tax arrears (net amount of Receivable Account) for the year ended 2013 is RM4.766 billion (56.55%) out of total tax arrears amounting to RM8.429 billion. While in 2014, companies tax arrears is RM4.365 billion (53.08%) out of RM8.224 billion.

An Audit performed between May until July 2015 in Cheras Branch, Wangsa Maju Branch and Large Taxpayer Branch located in Jalan Tunku Abdul Halim, Kuala Lumpur. The audit revealed that IRBM has taken appropriate action in distributing companies civil suit files to all IRBM branches starting Januari 2014 to enable prompt action taken for cases involved. However, evaluations conducted in 3 IRBM‟s branches found that the management of civil suit was less satisfactory due to weaknesses as follows:

i. IRBM‟s Civil and Litigation Department performance has implemented in 2014. However, the performance cannot be measured accurately as the data produced from the 3 branches were differ from the Revenue Collection Department (RCD) reported data;

ii. Non-compliance of work procedures involving:  delay in registering 140 out of 312 summons (44.9%) in court from 10 to 880 days amounting to RM113.94 million;  delay in delivering 108 out of 312 summons (34.6%) to companies from 2 to 128 days amounting to RM95.50 million;  no action taken after judgment was obtained towards 29 cases amounting to RM12.44 million;  delay in delivering 17 out of 312 Notice of Demand (5.4%) from 5 to 1,361 days amounting to RM79.10 million and no action taken to deliver 32 Notice of Demand (10.3%) towards companies up to 1st July 2015 amounting to RM5.56 million; and  winding up action is not taken towards 3 companies who failed to pay the remaining claims, and

iii. no action taken towards 7 companies which unable to obey the tax installment amounting to RM634,810 and submission of bad checks for tax installment amounting to RM941,763.

 

2 Comments on this Post

  1. THE IRBM has a responsibility to collect tax payer from the Company. Non compliance with the tax legislation and tax evasion should be penalized as provided in the Income Tax Act 1967. From AG’s Report it reveal that company tax arrears have increases in year 2015 . It involved RM4.365 billion has not been collected due to lack of IRBM’s Civil and Litigation Department to follow the work proceedings. This Department should performed better as their as a power to penalise the company who stubborn to pay. Therefore, to create and maintain public confidence in the tax administration system,the tax system must be fair, transparent and equitable and Compliance withthe tax legislation must be strictly enforced .

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  2. Inland Revenue Board of Malaysia (IRBM) responsible to inform that it is mandatory for taxpayers which are companies to furnish their estimated tax payable (Form CP204) and Revised Estimation (Form CP204A) for the year of assessment 2018 and onwards via e-Filing. IRMB have to create and maintain public confidence in the tax administration system where the tax system must be fair, transparent and equitable and Compliance with the tax legislation must be strictly enforced. IRBM should perform their work accordingly to avoid any delay and postponement of works then only the tax payer follow rules and pay taxes.

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