KUALA LUMPUR: Having declared your earnings to the taxman, you wear a satisfied smile.

Then comes a notice from the Inland Revenue Board that sends shock waves throughout your body.

The IRB says you owe hundreds or thousands of ringgit.

Or, having been told that the IRB owes you money, you are later informed, horror of horrors, that you instead owe several thousand ringgit.

If you are one of the many who have experienced this, take heart.
The IRB has good news for you. A revamp of the entire tax assessment system is under way, according to IRB chief executive officer Hasmah Abdullah.

It is part of the improvements to the public delivery system that Prime Minister Datuk Seri Abdullah Ahmad Badawi is pushing for.

Hasmah said the present system was “not perfect”.

“We are reviewing the system. We admit it is not the best. “The system does not always give an accurate picture because a taxpayer may be told today that he has overpaid only to be told a few months later that he owes us money.”

Hasmah said the new system would be put in place early next year.

“We are constantly looking at ways to improve our delivery system. The fact that we have fine-tuned our system three times in the past eight years is testimony to this.”

Many taxpayers have complained that the IRB does not give them a true picture of their tax status.

Some claim they are never told they owe the taxman money until, one day, they are suddenly hit with a notice. And this despite declaring their income returns.

Hasmah said such problems cropped up because bonuses for a particular year were paid the following year or on a staggered basis.

The other reason was that employers were not making deductions based on the Schedular Tax Deduction table provided by the IRB.

“But be assured that the new system will overcome this problem.”

On whether the changes would enable taxpayers to check their tax status online, she said: “This may not be possible in the next few months but we are working towards it.”

Hasmah said the IRB would be able to expedite refunds if more taxpayers used the e-filing mode.

“The delays occur because taxpayer have been filing their returns manually.

“If you do so manually, our officers would have to check the forms thoroughly, a process which we term as grooming. We have to do data imaging and capturing and this takes time.”

She said the number of taxpayers who were using e-filing was increasing, with 72,000 now, compared with 5,400 in April last year.

To encourage more tax agents to use e-filing, she said the IRB would give them special PIN numbers to enable them to electronically file tax returns for their clients.

The tax agent will have two pin numbers , one for himself and the other for his client.

“There are over 300,000 companies and most use the services of tax agents. If we don’t allow the agents to e-file for their customers, it defeats the purpose for which the e-filing system was set up.”

Only tax agents registered with the treasury will be given the privilege and they will also need to get the consent of their clients before they do e-filing.

She called on employers to hand over the EA forms early to their workers to enable them to file their returns before the deadline.

Employers were supposed to do so by March 31.

“I have been made to understand that some employers have not given out the forms. If they give the EA forms late, then it will only make things difficult for us as the taxpayers will file their returns just before the deadline.”

She said 70 per cent of taxpayers submitted their return forms two weeks before the deadline.

She added that there would be no extension of the April 30 deadline.