Sunday, March 25, 2012

Taxpayers to get refund in less than 30 days

That's right.

Taxpayers who filed their taxes via e-filing will receive their refunds within 30 days. Tax refunds will be credited directly into their bank accounts.

Inland Revenue Board, IRB head office in Kota Kinabalu

IRB public relations officer Masrun Maslim was quoted by Daily Express (March 25, 2012) to have stated that the refund would be made using Electronic Fund Transfer (EFT) system, which can shorten the processing time under a month.

“The process is done online and refunds will be credited directly into their bank accounts declared to the board when they fill up their Income Tax Return Forms (ITRFs),” he said in a statement in Kuala Lumpur.

The process could be expedited even further if tax-payers had submitted their ITRFs through e-filing. Tax payers must however, ensure that the information, such as their names and identification card numbers match the details in their declared bank accounts. Any discrepancies will result in delays.

Last year, the board approved as many as 1,270,000 refund cases. Of that, 285,261 cases or 24% were processed through EFT. The number of refund through electronic fund transfer is still far from IRB’s target due to a number of reasons, such as:
  1. Taxpayers are still apprehensive when declaring their bank account information when filling out the Forms,
  2. Bank accounts declared inactive,
  3. Bank accounts frozen or closed,
  4. Taxpayers had submitted passport and/or identification card numbers that did not match the information in their bank accounts.
I found, through online readings, that there are taxpayers who get refunds as soon as after 1 week of filing through e-filing. If I recall correctly, last year the amount of tax overpaid to the board was refunded to me in less than a month. So, this should be good news.

Get paid 2% if IRB refund late

Meanwhile, to show accountability on the part of IRB, starting from Year of Assessment 2013, a taxpayer who has submitted the income tax return within the stipulated period will be entitled to a compensation of 2% per annum on the amount of tax refunded late by the IRB.

The 2% compensation is payable where the amount refunded is made after:
  • 90 days from the due date (for e-filing); or
  • 120 days from the due date (for manual filing); whichever is applicable.

    Compare this to the current 10% penalty on taxpayers who are late in paying the outstanding tax or are late in submitting their returns, and you would feel hard done by.

    I agree. The quantum should be similar in two ways, vice versa.

    1. Tax budget 2012
    2. Inland Revenue Board of Malaysia

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