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KUALA LUMPUR – The results of a company audit by the National Audit Department show an increase in taxes and penalties amounting to RM16.35 billion that can be collected by the Inland Revenue Board of Malaysia (IRB).
The department also said the board’s tax audit objective had been achieved as no audit findings indicated an increased level of compliance by taxpayers.
“Nevertheless, there are weaknesses in the resolution of company tax audit cases with cases resolved beyond the stipulated period, as well as cases in arrears of between six months to six years.
“This could result in a delay in issuing additional assessment notices and will result in deferred tax to the government,” it said in the Auditor-General’s Report 2020 Series 1 released today.
Apart from that, there has been non-compliance in setting passwords as stipulated in the latest ICT Security Policy, and network and system security level assessments have not been carried out for self-assessment, risk assessment, and case management systems.
Overall, the report concluded that the management of the board’s tax audit activities has been implemented efficiently and effectively as the corporate key performance indicators (KPIs) and branch KPIs have achieved the set targets and have a backlog of 10%.
The report also recommended that IRB take immediate action to resolve the outstanding cases at its branches and constantly monitor cases directed to them so that the case backlog does not extend.
It said IRB also needs to review audit work procedures/quality standards as well as establish a mechanism to resolve outstanding cases so that each case can be resolved within a reasonable period.
“The Finance Ministry needs to study the policy and legal provisions related to the sharing of taxpayer information between IRB and third parties to help speed up the resolution of company tax audit cases.
“It is also necessary to ensure that aspects of internal control on password management and network management control are implemented to all applications in revenue transformation initiatives under the revenue integration tax system project set out in the security policy,” it said. – Bernama, March 22, 2022