Tax compliance failure represents financial risk such as financial penalties and increase of tax charge. It also leads to business risk as the tax authority will view the taxpayers differently and conduct a tax audit in the future.
The Malaysian tax authority has introduced the Monitoring Deliberate Tax Defaulters programme since 1 January 2014 to monitor the non-compliant taxpayers identified by them during tax audits. These taxpayers will be monitored until there are no repeated or new offences committed.
From the accounting perspective, it is true that the tax treatment does not always dovetail with the accounting treatment. The divergence between the accounting and tax treatments often increases the cost of doing business. As a result, more tax adjustments are required when furnishing income tax returns and a complicated accounting software will be necessary to facilitate tracking and retrieval of the business transactions for compilation of information purposes. Continue reading >>>