malaysia

IRB: 3,001 specialist doctors underpaid taxes

The Inland Revenue Board said over 3,000 specialist doctors had underpaid their taxes by wrongly declaring their income as corporate income. — Reuters file picThe Inland Revenue Board said over 3,000 specialist doctors had underpaid their taxes by wrongly declaring their income as corporate income. — Reuters file picKUALA LUMPUR, April 16 — Over 3,000 specialist doctors have underpaid their taxes by wrongly declaring their income as corporate income instead of individual income, the Inland Revenue Board (IRB) said.

IRB chief executive officer Datuk Sabin Samitah said however that these 3,001 specialist doctors had not failed to completely declare their taxes, but noted that they should have declared them as individual income.

“As many as 2,229 specialist doctors have stepped forward with ‘voluntary pengakuan’ (admission) of the tax amount and the nett penalty is around RM400 million. This nett amount is after taking into account the amount of the reduced assessment on corporate tax for the same income.

“It is undeniable that there are professionals detected evading tax, but to say it is becoming a culture may be unfair to professionals that always comply with the country’s tax laws,” he was quoted saying in an interview with Utusan Malaysia’s Sunday edition, Mingguan Malaysia, published today.

Sabin said the IRB had offered a concession period from September 2016 to December 30, 2016 for these doctors to voluntarily step forward and to correct their tax declaration for the assessment years of 2014, 2015 and 2016.

The 2,229 doctors who voluntarily stepped forward during the concession period will not be registered under the IRB’s Monitoring Deliberate Tax Defaulters Programme (MDTD), which lists audited taxpayers who will then be given higher penalty if they are later found to have again failed to comply with tax requirements.

“However, the remaining 772 people that did not step forward during the concession offer will be audited soon and will be registered in the MDTD list if the audit findings show that they did not comply with the appropriate tax treatment,” he said.

In explaining the doctors’ error, Sabin said the IRB had decided that consultant fees received by specialist doctors from their contract of services with private specialist hospitals is regarded as income from individual business, rather than income of a private limited company or Sdn Bhd.

He explained that doctors would enjoy a lower tax rate when they report such income as corporate tax, as they would otherwise be unable to make certain claims.

“Based on the cases handled, it is acknowledged that there are tax agents who have given the wrong advice to this group of specialist doctors on the ways to reduce the tax to be paid,” he said regarding the doctors who have voluntarily stepped forward.

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