The importance of settling your tax arrears with the Inland Revenue Board of Malaysia (IRBM) cannot be understated. Tax arrears are the amount of tax that remain unpaid by the taxpayer after the period stipulated by the IRBM.

The law stipulates that individuals who receive an employment income, and not a business income, have to pay their annual tax no later than April 30 every year. As for individuals who own a business, they are required to declare all their annual tax amounts no later than June 30 every year.

For companies, it is mandatory to pay all their tax amounts within seven months after the closing date of their accounting period.

Regardless of whether individuals are unable to pay their tax arrears within the period stipulated or neglected the payment on purpose or by accident, there are ramifications. For starters, the tax arrears will continue to increase with the higher amount of outstanding tax, resulting in higher taxes.

Failing to settle your tax arrears will also result in restricted overseas travel. Thus, those who have yet to settle their tax arrears may be barred from leaving the country by the Immigration Department of Malaysia.

Furthermore, there is the possibility of taxpayers being subject to legal action for failing to settle their tax arrears. This could include the confiscation and auctioning of movable properties and in certain cases, bankruptcy or liquidation actions may be taken. Both the court costs and interests will also be claimed against the taxpayers based on the court order.

The best way to safeguard your interests and position is by understanding the rules and regulations of Malaysian income tax laws. Taxpayers are encouraged to refer to the official IRBM portal at www.hasil.gov.my. EduZone, which is a platform for taxation education, is also an important resource with brochures, articles and videos related to taxation available to visitors.

Taxpayers can visit IRBM's official social media channel and the portals of certified taxation firms that specialise in taxation for further information. Avoid sourcing information from unofficial social media channels and accounts as the information could have been obtained from unverified sources. Taxpayers should also be wary of scams and calls requesting for tax payments. Always contact IRBM to get confirmation before making any transaction.

Additionally, taxpayers can utilise IRBM's MyTax App to track their latest tax position. The one-stop centre allows taxpayers to check their tax status and outstanding balance, declare their taxes as well as access the latest tax information from IRBM.

The statement of tax position can also be downloaded from the e-Lejar application through MyTax. Alternatively, taxpayers can make enquiries into their payment records and tax position by contacting the collection department at the branch handling their file or calling the Hasil Care Line.

Understanding the challenges taxpayers face when it comes to taxation matters, the IRBM has set up several channels for the public to access information and provide feedback. This includes contacting the IRBM through the Hasil Care Line at (03) 8911 1000/ (03) 8911 1100 (overseas), and through the Hasil Live Chat and customer feedback form on IRBM's official portal at www.hasil.gov.my as well as on IRBM's official Facebook, Twitter and Instagram accounts.

For taxpayers who are unable to fully settle their outstanding tax amount, they can contact the IRBM to discuss instalment payments. The IRBM instalment payment method is subject to prior approval and requires taxpayers to provide documentation such as monthly cash flow statements, latest months' bank statements, a list of monthly commitments and the number of proposed instalments. Taxpayers can also lodge an appeal on the tax increase imposed and the appeal will be considered by IRBM based on the merits of each case.

Based on the information provided here, taxpayers can limit their tax arrears through proper information and communication with the IRBM. Do ensure your tax arrears are settled no later than Dec 30, 2022, and make sure to keep expense receipts on year 2022 for tax relief purposes.

To find out more, visit the official IRBM portal at www.hasil.gov.my