Thursday, June 09, 2011

Monthly Tax Deduction Overpaid

The high incidence of overpaid tax to the Inland Revenue Board (IRB) can be reduced if employers revise the monthly tax deductions (PCB) from their staff in accordance with their tax relief.

It was reported that 147,601 taxpayers out of the 207,005 who submitted last year's income tax returns via IRB's e-filing between March 1 and 31 had overpaid.
IRB deputy director-general Mohammad Sait Ahmad said workers should use IRB's PCB/ TP1 form to request their employers to reduce the deductions.

Speaking after a briefing on the IRB's tax collection service yesterday, he said: "It is not a matter of choice that we want to deduct more.
"As far as possible we want from you not one sen more, not one sen less.

"Come December, you pay us the last payment. We don't want to collect anything more from you and we don't want to refund you anything. Zero balance."

Sait said the IRB put aside between RM5 billion and RM7 billion annually to settle taxpayers' refunds.

He said this year the refund was higher because of the one per cent reduction in the tax rate, adding that IRB had settled 75.55 per cent of refunds for this year.

"The remaining 25 per cent include some of the 400,000 taxpayers who waited until the last minute to hand in their tax returns between April 25 and April 30."

"Because of this deluge of tax returns, we are unable to refund these taxpayers within the promised period of 30 days for those using e-filing and 90 days for manual returns."

On the congestion at IRB's PCB payment counters between the 8th and 10th of the month, Sait urged employers to use the e-payment system.

He said about 4,000 employers flocked to the IRB's office here on the last three days of the 10-day PCB payment period every month, causing traffic congestion in the area with cars parked haphazardly all along the surrounding roads.

Note : To avoid tax refund, employer may use the PCB calculator to calculate the monthly PCB deduction, more accruate & user friendly. 

Read more: Employers urged to reduce tax deductions