KUALA LUMPUR - The results of a company audit carried out by the National Audit Department show that there is an increase in taxes and penalties amounting to RM16.35 billion that can be collected by the Inland Revenue Board of Malaysia (IRB).
The audit department also said the board's tax audit objective had been achieved as there were no audit findings indicating an increased level of compliance by taxpayers.
"Nevertheless, there are weaknesses in the resolution of company tax audit cases where cases are 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 is non-compliance in setting passwords as stipulated in the latest ICT Security Policy (DKICT) as well as network and system security level assessment is not carried out for three systems, namely the company's self-assessment system, risk assessment system and case management system.
Overall, the report concludes 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 per cent.
The report also recommended that the IRB take immediate action to resolve the outstanding cases found at the branches and constantly monitor the cases directed to the branches so that there is no prolonged case backlog.
It 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 the 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 DKICT,” it said. - BERNAMA
The audit department also said the board's tax audit objective had been achieved as there were no audit findings indicating an increased level of compliance by taxpayers.
"Nevertheless, there are weaknesses in the resolution of company tax audit cases where cases are 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 is non-compliance in setting passwords as stipulated in the latest ICT Security Policy (DKICT) as well as network and system security level assessment is not carried out for three systems, namely the company's self-assessment system, risk assessment system and case management system.
Overall, the report concludes 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 per cent.
The report also recommended that the IRB take immediate action to resolve the outstanding cases found at the branches and constantly monitor the cases directed to the branches so that there is no prolonged case backlog.
It 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 the 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 DKICT,” it said. - BERNAMA