COVER RATIONALE - Hasil · 2010-09-24 · The rationale behind the cover design is the...

The rationale behind the cover design is the transformation of tax

revenue into national development. The image of the tax assessment

notice (Form J) together with the ringgits and sens symbolise that the

c o re functions and responsibilities of the Lembaga Hasil Dalam Negeri

Malaysia (LHDN) are to assess and collect direct taxes for the Federal

G o v e rnment. The composite picture at the extreme right re p re s e n t s

how revenue from tax collection is used to develop the country

t h rough expenditure in managing and developing the economic,

social, security and administration sectors. The computer keys re f l e c t

the LHDN’s commitment in managing taxes more efficiently and

e ff e c t i v e l y, based on information and communications technology

(ICT).

COVERRATIONALE

CONTENTS

LHDN’S PLEDGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 1

C O R P O R ATE CULT U R E. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 2

Vi s i o n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 2

M i s s i o n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 2

O b j e c t i v e s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 2

Quality Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 2

G O V E R N A N C E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93

C h a i rm a n ’s Message. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 4

Corporate Inform a t i o n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 6

Corporate Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 0 0

■ Executive Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 0 0

■ Executive Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 0 5

■ Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 0 6

■ O rganisational Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 0 8

■ Wo r k f o rc e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 0 9

C O R P O R ATE PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 1 0

O p e r a t i o n s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 1 1

■ C o l l e c t i o n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 1 1

■ P rocessing of Returns and Documents . . . . . . . . . . . . . . . . . . . .1 1 3

■ Business Surv e y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 1 6

■ Tax Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116

■ I n v e s t i g a t i o n. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 1 6

■ Customer Serv i c e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117

■ Collection Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119

Development of the Self Assessment System . . . . . . . . . . . . . . . .1 2 0

I n t e rnational Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .122

■ Avoidance of Double Taxation Agre e m e n t. . . . . . . . . . . . . .1 2 2

■ Visits from Delegates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2 2

■ C o n f e rences, Seminars and

M e e t i n g s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2 4

T O WARDS ACHIEVING THE CORPORAT E

C U LT U R E. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2 5

E fficient and Effective Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2 6

Establishing a Professional Wo r k f o rc e. . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2 7

I m p roving Vo l u n t a ry Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 3 0

C O R P O R ATE DIARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 3 2

CHANGES TO LEGISLAT I O N. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 3 6

FINANCIAL STAT E M E N T S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 3 9

A P P E N D I C E S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 5 6

D I R E C T O RY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 7 6

L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A 9 1

PL E D G EWe, the officers of the LembagaHasi l Dalam Negeri Malaysia,pledge that we will,

focus our energy and eff o rt to achieve the

objectives of our org a n i z a t i o n ;

collect taxes according to the laws of the

c o u n t ry;

instil public trust in the fairness and

excellence of our tax administration;

encourage the public to pay the corre c t

amount of taxes voluntarily.

And are determined to,

p rovide friendly, helpful and satisfying

s e rv i c e ;

c a rry out our duties with eff i c i e n c y, quality and

e ff e c t i v e n e s s ;

uphold the values of tru s t w o rt h i n e s s ,

h o n e s t y, full responsibility and a positive

o u t l o o k ;

f o rever strive to improve the image of

the Lembaga Hasil Dalam Negeri

M a l a y s i a .


CU LT U R ECO R P O R AT E

We are committed to providing service of qualityp rofessionally to our clients. We shall ensure that ouro fficers and staff work towards excellence. Based onthese principles and guided by the Pledge of theLembaga Hasil Dalam Negeri Malaysia, we shallmake quality service our way of life.

General Objective

To create and implement an effective, just and fairtax management system.

Operational Objectives

• To collect taxes without imposing excessiveb u rden on the public while incurring minimalcost to the govern m e n t ;

• To instil public trust in the fairness and excellenceof the present tax system;

• To encourage the public to voluntarily pay theirt a x e s .

VISION MISSION

OBJECTIVES QUALITY PO L I C Y

The LHDN is committed towards collecting taxeswith fairness, efficiency and integrity, at a justifiablecost while providing excellent service to its clients.

This mission will be achieved by:

• Developing a skilled, efficient workforce andstriving constantly to enhance the level ofp rofessionalism to face challenges in an ever-changing enviro n m e n t ;

• Upgrading tax administration while simplifyingtax laws;

• O ffering friendly, fair and consistent service allthe time;

• N u rturing public consciousness toward sp roducing responsible taxpayers;

• Encourage voluntary tax compliance.

• LHDN is recognized as the foremost taxadministration in the region and the bestg o v e rnment agency in the country ;

• C reation of a just, transparent and re s p e c t a b l etax management system;

• LHDN management is always sensitive to thew e l f a re of its employees, provides care e radvancement opportunities for each employeeand recognizes individual excellence;

• O fficers and staff members of LHDN arecommitted towards achieving excellence in workand efficiency in service to clients;

• The public has a high degree of confidence in thef a i rness of the country ’s tax system.

GOVERNANCE


The Lembaga Hasil Dalam Negeri Malaysia (LHDN) continued to

i m p rove its perf o rmance in 2002. Direct tax collection continued

to rise by 6.05% from RM41.79 billion to RM44.32 billion, thanks

to the various measures taken by the LHDN, not only to incre a s e

revenue collection, but also to reduce leakage.

These measures include stern action against errant tax-evaders as

well as those with outstanding taxes. In addition, business surv e y

operations to identify new taxpayers and audits were carried out

to help further improve collection. The LHDN also implemented

educational programs to enlighten and improve compliance of

taxpayers in declaring voluntarily and accurately in accord a n c e

with the stipulated laws and re g u l a t i o n s .

2002 was the second year in which corporate income tax was

collected under the Self Assessment System (STS). The

p e rf o rmance in corporate income tax collection was most

encouraging. Current work to develop the STS for non-corporate

taxpayers shall continue to be carried out in 2004 and will focus

on the education of taxpayers on self-re p o rting, self-calculating

and self-paying the appropriate amount of tax; and the

development of the management system, as well as work

p ro c e d u res and processes.

CHAIRMAN’S MESSAGE

On behalf of the Board of Directors, I would like to take this

o p p o rtunity to re c o rd my appreciation to the management and

employees of the LHDN, for their hard work, untiring

commitment and professionalism in raising the org a n i s a t i o n ’s

level of excellence and success this year. I would also like to thank

all LHDN Members for their service and guidance, which has

p ropelled the LHDN to greater heights.

TAN SRI DR. SAMSUDIN BIN HITA MC h a i rman, Lembaga Hasil Dalam Negeri, Malaysia


Tan Sri Dr. Samsudin bin Hitam

Tan Sri Jamaluddin bin Hj. Ahmad Damanhuri

Dato’ Salmahbinti Abdul Rahman


Datuk Siti Hadzar binti Mohd. Ismail

Datuk Siti Maslamahbinti Osman

Dr. Mohamed Ariffbin Abdul Kareem

Datin Dr. Umi Kalsum binti Mohd. Noh

CORPORATE INFORMATIONBoard Members


E s t a b l i s h m e n tLembaga Hasil Dalam Negeri Malaysia (LHDN) was formed on

M a rch 1, 1996 in accordance with the Inland Revenue Board of

Malaysia Act 1995 (ACT 533). Following the formation of the

B o a rd, an agency agreement was signed between the

G o v e rnment of Malaysia and the Board on December 31, 1998.

The Inland Revenue Board of Malaysia Act 1995 provides for the

LHDN to act as agent of the Government and to provide serv i c e s

re g a rding matters pertaining to taxes or other revenues under all

legislation administered by the LHDN.

F u n c t i o n sThe functions of the Board are :

To act as agent of the Government and to provide services in

administering, assessing, collecting and enforcing payment of

income tax, petroleum income tax, real pro p e rty gains tax,

Labuan off s h o re business activity tax, stamp duties, estate duty

and such other taxes.

To advice the Government on matters relating to taxation and to

liaise with the appropriate ministries and statutory bodies on such

m a t t e r s .

To participate in meetings, discussions and agreements in or

outside Malaysia in respect of matters relating to taxation.

To act as collection agent on behalf of any lending body of the

re c o v e ry of loans due for repayment to that body under any

written law.

To perf o rm such other function as are conferred on the Board by

any other written law.

R e s p o n s i b i l i t i e sLembaga Hasil Dalam Negeri Malaysia (LHDN) is responsible to the

G o v e rnment in administering the following laws:

■ Income Tax Act 1967;

■ Real Pro p e rty Gains Tax Act 1976;

■ P romotion of Investments Act 1986;

■ Stamp Act 1949;

■ P e t roleum (Income Tax) Act 1967; and

■ Labuan Off s h o re Business Activity Tax Act 1990.

The LHDN also administers the Double Taxation Agre e m e n t s

signed between the Government of Malaysia and other countries

as well as observing laws relating to its functions, which are :

■ Federal Constitution.

■ Companies Act 1965.

■ B a n k ruptcy Act 1967.

■ C o u rt of Judicature Act 1964.

■ I n t e r p retation Act 1948 and 1967.

■ G o v e rnment Proceeding Act 1956.

■ Limitation Act 1953.

■ Inland Revenue Board of Malaysia Act 1995.

■ National Land Code 1965.

■ Criminal Proceeding Code.

■ Penal Code.

■ Rules of High Court 1980.

■ S u b o rdinate Court Rules 1980.

■ Companies Winding-Up Rules 1965.

The LHDN also administers repealed acts for past years cases such

as Estate Duty Enactment 1941 and Share Transfer Tax Act (Land

Based Companies) 1984.


O fficial Addre s sChief Executive / Director General of Hasil Dalam NegeriLembaga Hasil Dalam Negeri15th Floor, Block 9Kompleks Bangunan KerajaanJalan Duta, P. O. Box 11833 50758 Kuala Lumpur.Te l e p h o n e : 0 3 - 6 2 0 9 1 0 0 0F a x : 0 3 - 6 2 0 1 3 7 9 8We b s i t e : w w w. h a s i l n e t . o rg . m y

B o a rd Of Directors’ MeetingThe Board held four meetings in 2002.

L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A 1 0 0

In 2002, the Lembaga

Hasil Dalam Negeri

Malaysia (LHDN) collected

revenue of RM44,324

million, compared to

RM41,794 million

re c o rded in 2001. This

i n c rease is attributed to

the Government policies

implemented by the

LHDN through collection,

assessment, enforc e m e n t

and customer serv i c e

p rogrammes.

“


In 2002, the Lembaga Hasil Dalam Negeri (LHDN)

collected revenue of RM44,324 million, compared to

RM41,794 million re c o rded in 2001. This increase is

attributed to the Government policies implemented by

the LHDN through collection, assessment, enforc e m e n t

and customer service programmes. These four principal

p rogrammes were not only aimed at increasing short - t e rm

tax collection, but also at improving long-term collection

t h rough voluntary compliance by taxpayers in accord a n c e

with taxation laws and re g u l a t i o n s .

I m p roving the effectiveness and proficiency oftax collection and assessment

Tax collection rose 6.05% from 2001 to 2002. Company

income tax, re p resenting 61.78% of the total collection,

i n c reased by 26.88%. This commendable increase was

achieved through the implementation of the Self-

Assessment System (STS), which empowers companies to

s e l f - a rrange tax payments based on their perf o rm a n c e .

Real pro p e rty gains tax and stamp duty collected also

i m p roved by 50.53% and 7.54% re s p e c t i v e l y, as

c o m p a red to 2001. However, the income tax component

f rom individuals, upstream petroleum activities, Labuan

o ff s h o re business activities and estate duty dropped by

15.36%, 22.54%, 7.15% and 42.91% re s p e c t i v e l y.

During 2002, the LHDN continued to implement

collection programmes through law-enforced collection

schemes, whilst improving effectiveness in the

management of receivables, in an eff o rt to re d u c e

revenue deficit arising from the failure of taxpayers to

settle their taxes within the specified period. Amongst

others, the LHDN took legal action by issuing 3,979

summonses amounting to RM1,042 million in

outstanding taxes.

In 2002, the LHDN issued 3.38 million income tax re t u rn s

to corporations, individuals, cooperatives, trusts, clubs

and societies. As at December 2002, the LHDN had

received 2.16 million responses from these taxpayers, an

i n c rease of 13.81% from the previous year. The LHDN

continues to address the failure of taxpayers in submitting

their tax re t u rns via:

■ i n f o rmation sharing with other government agencies,

■ detection through business survey operations, and

■ u n relenting enforcement of laws and regulations.

In its assessment program, the LHDN raised income tax

assessments (either through formal assessment or self-

assessment), real pro p e rty gains taxes, Labuan off s h o re

business activity taxes, stamp duties and estate duties

CO N T R I B U T I O N O F DI R E C T TA X E S T OT H E FE D E R A L GO V E R N M E N T RE V E N U E

D i re c tTa x(RM M i l l i o n )

F e d e r a lG o v e rn m e n tR e v e n u e(RM M i l l i o n )

% On F e d e r a lR e v e n u e

1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

4 6 . 3 6 %

5 2 . 8 6 %5 3 . 0 7 %

5 2 . 5 3 %

4 6 . 0 9 %

4 7 . 1 5 %

CORPORATE MANAGEMENT

Executive Report


“Tax collection rose 6.05% from 2001 to 2002. Company income tax,

representing 61.78% of the total collection, increased by 26.88%.“

totalling RM35,278 million, an increase of 26.73% fro m

the previous year. This overall assessment also includes

taxes raised through external audit and investigation

activities, which contributed RM77.03 million and

RM386.80 million re s p e c t i v e l y.

Overall proficiency in tax management stood at 1.23%

against 0.86% in 2001, where the LHDN spent RM1.23

for every RM100.00 of tax collected. This increase in

o rganisational management costs is due to the increase of

56.81% in staff costs, arising from staff’s salary and

allowance adjustments for previous years. The policy of

p rudent management is continually practised and

p rogrammes to educate taxpayers on the STS enhanced,

whilst new officers are re c ruited to support human

re s o u rce needs.

Incessant Delivery of Friendly, Helpful,Satisfying Serv i c e

To increase revenue collection, the LHDN carried out

several initiatives throughout this year, which sought to

widen the tax base as well as to improve its serv i c e .

Enhancing convenience in submitting tax re t u rn s

Submitting tax re t u rns at the eleventh hour has become

the norm for city dwellers due to their hectic daily

schedules. The LHDN acknowledges this matter and has

taken several initiatives to make it more convenient for

taxpayers to submit their forms before the due date. Wi t h

the cooperation of Pos Malaysia, the LHDN pro v i d e d

special post boxes at post offices and shopping malls

a round the country for this purpose. The LHDN also

extended the submission period by a week from the last

date of submission. The rate of compliance for tax re t u rn s

in 2002 is 63.90%.

COMPONENTS OF REVENUE COLLECTION

CO S T O F MA N A G E M E N T

C o m p a n i e s I n d i v i d u a l s P e t ro l e u m Stamp Duty R P G T O t h e r s

2000 (RM M i l l i o n)

2001 (RM M i l l i o n)

2002 (RM M i l l i o n)

1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

M a n a g e m e n tC o s t(RM M i l l i o n)

R e v e n u eC o l l e c t i o n(RM M i l l i o n)

M a n a g e m e n tP e rf o rm a n c e

1 . 0 20 . 9 0

1 . 1 91 . 1 3

1 . 2 3

0 . 8 6

6 1 . 7 8 %

5 1 . 6 4 %4 7 . 9 3 %

2 0 . 1 0 %

1 6 . 0 4 %

2 4 . 1 4 %

3 . 9 3 %3 . 9 9 %6 . 1 3 %

0 . 5 5 %0 . 7 8 %0 . 8 5 %

0 . 1 9 %

0 . 3 3 %

2 0 . 6 1 %

1 7 . 2 3 %

2 3 . 5 9 %

0 . 1 9 %


Raising awareness of self-assessment

To increase the level of voluntary tax compliance, which is a

fundamental factor for the success of the Self-Assessment

System (STS), the LHDN launched educational pro g r a m m e s

aimed specifically at individual taxpayers, focussing on

salaried income earners and sole proprietors. Thro u g h o u t

2002, the LHDN held 476 talks and briefings, involving the

p a rticipation of 30,442 taxpayers, tax agents and members

of the public nationwide.

Enhancing interest in taxation

Raising the level of voluntary compliance with taxation laws

in the long-term amongst the tax-paying public, not only

i n c reases the Govern m e n t ’s revenue collection, but also

i n s t rumental in lowering compliance costs borne by the

taxpayer in the future. To this end, and in an eff o rt to raise

a w a reness and ignite interest in taxation amongst youths,

the LHDN collaborated with the Ministry of Education and

Berita Harian to organise the 2002 Inter-School Essay

Competition. 251 entries were received from various

p r i m a ry and secondary levels. The competing essays were

on the responsibility of paying taxes, and the importance of

taxes to the national development.

Similar competitions will be held in the future to furt h e r

raise awareness and cultivate positive interest in taxation

amongst future taxpayers.

The LHDN is aware that the media plays an important ro l e

in ensuring that information disseminated to the public is

accurate and correct. In view of this, courses and briefings

w e re held for print and electronic media re p resentatives to

i n f o rm them on the STS, due to commence in 2004 for non-

company taxpayers, as well as to enlighten them on the

range of services provided by the LHDN.

P romoting understanding and wideningexperience at the international level

As the country ’s direct tax administrator, the LHDN actively

p a rticipates in international taxation association

c o n f e rences, such as SGATAR*, CATA* and IOTA * .

Malaysia received the mandate to re p resent SGATAR* at the

Co-sponsors of the Montreal Conference in Quebec City,

Canada, with the objective of exchanging information and

views on economic development and taxation.


“Through the dedication and commitment of all officers, I am certain that the

LHDN will be able to maintain its excellent performance in the future. I would

like to thank all LHDN staff, who have carried out their duties with full

dedication and professionalism.“

* N o t e :

S G ATA R - Study Group on Asian Tax Adminstration and Researc hC ATA - Commonwealth Association for Tax Administrators

I O TA - I n t r a - E u ropean Organisation of Tax Administrations O E C D - O rganisation for Economic Co-operation and Development

LHDN officers regularly attend continuous training within

the country or abroad. 24 officers attended intern a t i o n a l

courses held by OECD*, CATA* and the Inland Revenue

D e p a rtment, Hong Kong. The LHDN, assisted by the

Malaysian Technical Co-operation Programme, also

conducts international courses, aimed at:

■ generating exposure to modern taxation concepts, ideas

and management techniques;

■ enabling the exchange of views and knowledge;

■ establishing networking and friendship among

p a rticipants from countries attending these courses; and

■ enhancing the international image of the LHDN

s p e c i f i c a l l y, and of Malaysia generally.

The FutureSTS for individual taxpayers, cooperatives, trusts, clubs and

societies will be implemented in 2004. Curre n t l y, the

p rocess of legislating taxation laws and regulations, the

establishment of systems and work processes, the

i n f r a s t ru c t u re development of a computerised system, and

the development of educational programmes geare d

t o w a rds STS awareness are being actively pursued and shall

continue until the STS is implemented and its systems and

p rocesses achieve stability. It is the focus of the LHDN to:

■ implement STS educational and awareness activities, in ord e r

to provide knowledge in re c o rd-keeping, preparation of

account statements and correct self-assessment of income

tax, as well as to inculcate awareness of the rights and

responsibilities of taxpayers;

■ p rovide transparent regulations, systems, work pro c e d u re s

and processes that will not be onerous on the taxpayers as

well as to improve the overall effectiveness and proficiency in

tax management.

A c k n o w l e d g e m e n t

T h rough the dedication

and commitment of all

o fficers, I am certain that

the LHDN will be able to

maintain its excellent

p e rf o rmance in the future .

I would like to thank all

LHDN staff, who have

c a rried out their duties

with full dedication and

p rofessionalism. My most

h e a rtfelt gratitude is

d i rected to the Board

members for their advice

and guidance. I also wish

to re c o rd my appre c i a t i o n

to the Ministry of Finance

and the Economic Planning Unit for their support throughout the

y e a r. To all taxpayers who have contributed towards national

development, we at the LHDN wish to thank you for your co-

operation and hope that this relationship and rapport will

continue. I am confident that the LHDN will continue to pro v i d e

its friendly service, and will always be ever ready to accommodate

and address your needs and re s p o n s i b i l i t i e s .

D ATO’ ZAINOL ABIDIN BIN ABD. RASHID

Chief Executive / Director General of Hasil Dalam Negeri Malaysia


Dato’ Hj. Abu Hassan bin Hj. Md. AkhirDeputy Director General,Development

Dato’ Zainol Abidin bin Abd. RashidChief Executive / Director General

of Hasil Dalam Negeri

Mohd Saian bin Hj. RidzuanDeputy Director General,Operations and Information Technology

Hasmah binti AbdullahDeputy Director General,Compliance and Prevention

Executive Management


Che Omar bin A. RahamanD i rector of Tax Audit Division

D r. Mohd. Shukor bin Hj. MahfarD i rector of Operations Division

Ab. Rahim bin AbdullahD i rector of Corporate Services Division

Mohd. Zaid bin IsmailD i rector of International Tax Division

Nik Esah binti Nik MahmoodD i rector of Technical Division

Lim Gaik HwaD i rector of Quality and Internal Audit Division

Salmah binti KasimD i rector of Legal Division

D r. Siti Mariam binti Che Ay u bD i rector of Research and Development Division

1

2

3

4

5

6

7

8

1 2 3 4 5 6 7 8


Zakaria bin A. SamadD i rector of Finance Division

I r. Syed Mohd. Hamdan bin Syed Harm a nD i rector of Pro p e rt y Management Division

Ng Yew HoonD i rector of Investigation and Intelligence Division

Mohd. Azmi bin Wan Ab. RahmanD i rector of Information Technology Division

Tengku Kamarulzaman bin Tengku AhmadD i rector of National Tax Academy

Wan Noorsiah binti Wan AbdullahD i rector of Compliance and Prevention Division

N o o rhayati binti IsmailD i rector of Human Resources Management Division

Siti Normah binti Hj. Mohd. BakiD i rector of Human Resources Planning and Org a n i s a t i o nDevelopment Division

Zaharah binti MokhtarD i rector of Supply and General Services Division

9

10

11

12

13

14

15

16

17

Senior Management

9 10 11 12 13 14 15 16 17


Chief Executive /

D i rector Generalo f

Hasil Dalam N e g e r i

Deputy Dire c t o rGeneral

D e v e l o p m e n t

Operations D i v i s i o n

Quality & I n t e rn a lAudit Division

National Tax Academy

I n f o rmation Technology

D i v i s i o n

Investigation &Intelligence

D i v i s i o n

Corporate Serv i c e sD i v i s i o n

P ro p e rty Management

D i v i s i o n

Compliance & Prevention

D i v i s i o n

Tax AuditD i v i s i o n

L e g a lD i v i s i o n

R e s e a rch &D e v e l o p m e n t

D i v i s i o n

F i n a n c eD i v i s i o n

Human Resourc e sManagement

D i v i s i o n

Tr a n s f o rm a t i o nU n i t

35 AssessmentB r a n c h e s• K a n g a r

• Alor Setar

• Sg. Petani

• P e n a n g

• Bkt. Mert a j a m

• Ta i p i n g

• I p o h

• Teluk Intan

• Kuala Lumpur

• C h e r a s

• Wangsa Maju

• S y a r i k a t

• Kg. Attap

• Non Resident

• Petaling Jaya

• Shah Alam

• K l a n g

• S e re m b a n

• M a l a c c a

• M u a r

• K l u a n g

• Johor Bahru

• K u a n t a n

• R a u b

• Kuala Te re n g g a n u

• Kota Bharu

• K u c h i n g

• S i b u

• B i n t u l u

• M i r i

• L a b u a n

• K e n i n g a u

• Kota Kinabalu

• S a n d a k a n

• Ta w a u

3 CollectionB r a n c h e s• Kuala Lumpur• K u c h i n g• Kota Kinabalu

15 Investigation & Intelligence C e n t re s• Kuala Lumpur• Shah Alam• S e re m b a n• M a l a c c a• Johor Bahru• K l u a n g• K u c h i n g• Kota Kinabalu• Alor Setar• Ta i p i n g• I p o h• P e n a n g• Kota Bharu• Kuala Te re n g g a n u• K u a n t a n

Supply &General Serv i c e s

D i v i s i o n

I n t e rn a t i o n a lTax

D i v i s i o n

Te c h n i c a lD i v i s i o n


Operations &I n f o rmation Te c h n o l o g y


C o m p l i a n c e& Pre v e n t i o n

Deputy Dire c t o rG e n e r a l

Technical & Legal

Organisational Chart

Human Resourc e sPlanning &

O rg a n i s a t i o nDevelopment Division


In 2002, 686 new posts of various grades and categories

w e re created. 74 officers (6 filling vacancies and 68 in new

posts) of various grades and categories were pro m o t e d ,

whilst 57 officers re t i red, were terminated or re s i g n e d .

Subsequent to this, the LHDN re c ruited 364 new officers to

fill new and vacant posts due to promotion, re t i rement and

re s i g n a t i o n .

Up to end of 2002, the LHDN operated with a 7,068-strong work

f o rce (6,830 fulltime officers and 238 part-time officers) stationed

at Headquarters, Branches and Centres nationwide. This

re p resents an addition of 7.79% to last year’s workforce. Of this

total, 64.47% who are on duty at 38 branches and 15 centre s

t h roughout the country are engaged in operational activities such

as assessment, audit, investigation, collection, enforc e m e n t ,

customer service and detection. The remaining officers perf o rm

management and core duties at Headquart e r s .

WO R K F O R C E BY AC T I V I T Y

C a t e g o ry of Post Management and Core O p e r a t i o n s L e g a lI n f o rm a t i o nTe c h n o l o g y A d m i n i s t r a t i o n To t a l

Certificate&

Secondary

63%

14%

2%

21%

Ph.D / Master

Diploma / STPM

BachelorsDegree

WO R K F O R C E BYAC A D E M I C QU A L I F I C AT I O N

Workforce

Executive Staff 1 1 6 1 , 6 4 1 2 7 5 1 5 3 1 , 8 8 8

Assistant Executive Staff 7 1 9 7 6 3 9 2 4 2 7 3

Non-Executive Staff 1 1 9 1 , 5 7 1 7 5 5 5 1 2 , 3 5 3 4 , 6 6 9

To t a l 2 4 2 3 , 4 0 9 1 0 8 6 4 1 2 , 4 3 0 6 , 8 3 0

WO R K F O R C E B Y GE N D E R A N D AG E

Less Than3 0

30 - 40 40 - 50 A b o v e50

Ye a r s

M e n Wo m a n

PE R F O R M A N C ECO R P O R AT E


C o l l e c t i o nRevenue from direct tax collection in 2002 rose 6.05% to

RM44,324 million, against RM41,794 million in 2001.

Although this is 3.90% less than the total revised estimate

of RM46,125 million for the year, direct taxes collected by

the LHDN re p resented 53.07% of the 2002 revenue of the

Federal Government. The main contributor was company

income tax with 61.78% of overall collection, followed by

individual income tax, income tax from upstream petro l e u m

activities, and stamp duty.

Income tax was collected via:

■ p a y - a s - y o u - e a rn scheme, known as Scheduler Tax Deduction

(STD),

■ payment by estimated instalments,

■ issuance of notices of assessment,

REVENUE COLLECTION ACCORDING TO TYPE OF TAXES

OPERATIONS

C o m p a n i e s I n d i v i d u a l P e t ro l e u m Stamp Duty O t h e r s

RM M i l l i o n

1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

Revenue Collection (RM Million)

Revised Estimate(RM Million)

1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

2 9 , 5 6 72 7 , 8 6 3

2 6 , 9 1 0

3 4 , 2 5 6

2 9 , 8 0 8

4 6 , 1 2 5

REVENUE COLLECTION COMPAREDTO THE REVISED ESTIMATE


■ self-assessment system (STS),

■ withholding, i.e. either final tax or withholding, pre-issue of

the tax assessment statement, and

■ debt management activities.

Company taxpayers exercise the instalment scheme based

on tax estimate, followed by payment of the balance, or

request for refund, upon submission of their Income Ta x

R e t u rns (ITR). Salaried individual taxpayers pay by salary

deduction through their employers via the STD scheme,

followed by payment of the balance, or request for re f u n d ,

upon submission of the ITR. Likewise for other taxpayers,

who pay their taxes through the instalment scheme based

on tax estimate, followed by payment of the balance, or

request for refund, upon submission of the ITR. Almost

90% of the total income tax (including petroleum) was

collected via the instalment scheme and STD.

Taxes on which withholding was imposed, other than on

s a l a ry income, were tax on payment of dividend, interest or

royalty to residents (sections 109, 109C and 110); and on

payment of service, contract, ro y a l t y, salary and fees to non-

residents (sections 107A, 109, 109A and 109B).

A p p roximately 2.39% of the total income tax (including

p e t roleum) was collected via the withholding scheme.

FEDERAL GOVERNMENT REVENUE 2002

53.1%

19.9%

RM83,515million

27.0%

DirectTax

IndirectTax

NonTax Revenue

COMPONENT OF DIRECT TAXES 2002

61.78%

16.04%

17.23%

3.99%0.96%

Companies Individual Petroleum

Stamp Duty Others

T h roughout 2002, refunds by the LHDN totalled RM1,653.43

million, paid out to 77,014 taxpayers for overpayment (instalment

or STD) or tax cre d i t .

The majority of taxpayers settled their obligations within the

specified periods, either by:

RM44,324million

CONTRIBUTION OF DIRECT TAXES TO THEFEDERAL GOVERNMENT REVENUE

1 9 9 7 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

Federal Govern m e n tR e v e n u e(RM Million)

G D PR e v e n u eC o l l e c t i o n(RM Million)

3 . 0 4 %

3 . 5 2 %3 . 4 1 %

3 . 2 3 %

2 . 4 0 %2 . 5 1 %


c l o s u re of accounts (i.e. automatically granted an extension

period of 2 months). Other taxpayers submitted their 2001

ITR on or before 31 May 2002. As at December 2002,

63.90% of ITR issued for assessment year 2001 had been

duly re t u rned by taxpayers. This re p resents an increase of

2.61% from 2001.

With re g a rd to real pro p e rty gains tax, the LHDN re c e i v e d

162,446 disposal forms (Form CKHT 1), which were

completed by the disposer or transferor of the real pro p e rt y,

or shares in a real pro p e rty company.

Legal action will be taken against taxpayers who fail to

submit their ITR within the specified period, should the

p rocess of reminding and servicing not yield positive re s u l t .

In 2002, 18,949 cases / taxpayers were served compounds

by the LHDN for failure to submit ITR amounting to

RM5,597,284. In addition, 3,851 cases / taxpayers were

fined a total of RM1,053,095 by the Court for the same

o ff e n c e .

■ instalment,

■ t h rough remittance by employer (STD) or payer,

■ by payment upon submission of ITR, or

■ in a lump sum payment upon receipt of the notice of

assessment.

Penalty of 10% will be imposed upon failure to settle within

the specified period of the first 30 days, and an additional

5% if payment was still not made within 60 days. Ta x p a y e r s

who failed to settle after 60 days were denied permission to

leave the country, or were subjected to legal action. This

y e a r, 3,979 summonses were filed, involving a total tax

payable of RM1,042,191,070. Also, 7,857 individuals, who

owed a total of RM436,671,030 in unpaid taxes, were

denied permission to leave the country.

P rocessing of Return sand DocumentsIn 2002, the LHDN forw a rded 3.48 million tax re t u rns to

taxpayers, covering income tax assessment, real pro p e rt y

gains tax, and Labuan off s h o re business activity tax, for

assessment year 2001, as well as for previous years.

Company taxpayers submitted their ITR for assessment year

2001 within the period of eight months from the date of

IS S U A N C E, RE C E I P T A N D AS S E S S M E N T O FIN C O M E TA X RE T U R N

* These does not include wife assessment

I s s u a n c e

M i l l i o n

R e c e i p t A s s e s s m e n t *

1 9 9 81 9 9 7 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

C o m p a n i e s * 1 7 2 , 4 0 3 1 7 3 , 6 4 9 8 2 , 1 2 5

I n d i v i d u a l :B u s i n e s s 9 9 9 , 1 2 0 6 8 4 , 2 1 0 5 4 9 , 2 9 1E m p l o y m e n t 2 , 0 7 8 , 8 0 4 1 , 2 1 7 , 9 8 5 1 , 2 0 1 , 8 2 2

P a rt n e r s h i p 1 1 6 , 7 7 6 7 6 , 4 8 2 5 6 , 7 8 9

O t h e r s * * 1 2 , 6 5 6 7 , 2 7 0 5 , 1 8 3

To t a l 3 , 3 7 9 , 7 5 9 2 , 1 5 9 , 5 9 6 1 , 8 9 5 , 2 1 0

Type of ITR I s s u a n c e R e c e i p t A s s e s s m e n t * * *

Notes:

* These include cooperatives and upstream petroleum activities.

** These refer to ITR for trusts, clubs, associations and Hindu joint family.

*** These include taxable and non-taxable cases, and repayment for both formal anddeemed assessment.

ISSUANCE, RECEIPT AND ASSESSMENTOF ITR 2002


AS S E S S M E N T AN D CO L L E C T I O N OF IN C O M E TA X

2 0 0 1 2 0 0 2

Transfer of real pro p e rty and share s 3 8 8 , 7 1 2 7 2 3 , 0 9 8 , 8 4 4 3 8 9 , 6 9 0 7 9 7 , 1 3 4 , 3 0 0

Lease and rental of real pro p e rt y 2 7 3 , 2 1 1 2 7 , 4 0 1 , 9 6 2 2 8 3 , 9 0 7 2 6 , 4 3 1 , 7 1 9

Instuments for lease security and others 2 , 5 1 2 , 9 4 6 3 9 7 , 9 6 0 , 3 3 3 2 , 3 4 2 , 6 6 1 3 9 4 , 0 6 3 , 3 9 9

Memorandum of Association of a company 7 2 , 8 8 8 5 , 6 2 1 , 0 6 0 7 2 , 9 3 4 6 , 0 8 8 , 4 9 1

Other documents / Assessment fee /Compound duty / Franker post 6 , 5 8 2 , 0 9 6 4 2 0 , 4 0 5 , 0 6 1 6 , 6 8 6 , 5 8 4 4 6 2 , 3 9 0 , 2 2 6

Document subjected to penalty 8 0 , 3 4 7 8 , 6 5 0 , 1 4 9 9 2 , 5 1 3 8 , 2 5 3 , 7 2 0

To t a l 9 , 9 1 0 , 2 0 0 1 , 5 8 3 , 1 3 7 , 4 0 9 * 9 , 8 6 8 , 2 8 9 1 , 6 9 4 , 3 6 1 , 8 5 5 *

Type of DocumentN u m b e r Amount of Duty

( R M )N u m b e r

Amount of Duty( R M )

2 0 0 1 2 0 0 2

Stamp duty was imposed on stamped instruments or

documents effecting agreements, contracts, transactions

(title transfers, leases or rentals) of fixed pro p e rty or

moveable pro p e rt y. In 2002, the LHDN received 9,868,289

documents / instruments on various types / compositions for

stamping, compared with 9,910,200 documents re c e i v e d

for stamping in 2001.

A s s e s s m e n t

As at end 2002, the LHDN assessed 87.75% of the total ITR

received, by formal assessment and by deemed assessment,

involving a total of RM33,103,415,125 in income taxes,

c o m p a red with 83.85% or a total of RM25,828,510,783 in

income taxes the previous year. The amounts assessed for Labuan

o ff s h o re business activity tax and estate duty were RM11,713,067

and RM1,128,135 re s p e c t i v e l y. The tax or duty amounts assessed,

included taxes or duties arising from audit and investigation

a c t i v i t i e s .

ASSESSMENT AND COLLECTION OF STAMP DUTIES

Number of assessments* 2 , 2 2 7 , 9 2 0 2 , 4 7 9 , 8 9 3

Net amount assessed R M 2 5 , 8 2 8 , 5 1 0 , 7 8 3 R M 3 3 , 1 0 3 , 4 1 5 , 1 2 5

Grand total collection R M 3 9 , 9 0 5 , 3 7 2 , 1 8 8 R M 4 2 , 1 9 7 , 5 0 7 , 6 3 4

Less: Repayment R M 1 , 5 3 1 , 6 2 4 , 4 6 6 R M 1 , 6 4 2 , 6 0 8 , 2 9 0

Net total collection R M 3 8 , 3 7 3 , 7 4 7 , 7 2 2 R M 4 0 , 5 5 4 , 8 9 9 , 3 4 4

* These include wife assessment.

* These does not include duty collected by the District Office totalling RM27,572,948 (2001 - RM30,545,533).


Real pro p e rty gains taxes are imposed on disposers who

p rofited from the disposal or transfer of real pro p e rty or

s h a res in a real pro p e rty company. In 2002, 132,950 tax

assessment notices were issued, totalling RM467,214,943

an increase of 13.99% against the total of RM409,859,102

assessed in 2001.

Stamp duty imposed on instruments or documents

submitted for stamping totalled RM1,721,934,803, as

c o m p a red to the total of RM1,613,682,942 in the pre v i o u s

y e a r. Stamp duty through revenue stamps (stamped /

assessed) stood at RM47,912,132 against RM95,599,808

w o rth of revenue stamps sold (collected) in the same

p e r i o d .

P rotests and Appeals

Taxpayers who dispute the assessments issued by the LHDN may

submit their protests within 30 days from the date on which the

notice of assessment was issued. Subsequently, if they are still

dissatisfied with the decision of the LHDN, taxpayers may make

an appeal to the Special Commissioner of Income Tax. An appeal

can next be made to the High Court, followed by the Federal

C o u rt or the Court of Appeal, if either party should disagree with

the judgment passed by the legal institution below it.

In process (b/f) 3 5 1 2 1 5 7 3 5 4 0

Field during the year 2 1 2 8 4 2 4 4 0 0

Total 5 6 4 0 1 9 9 7 9 4 0

S e t t l e d 3 4 2 5 1 2 7 2 4 4 0

In process (c/f) 2 2 1 5 2 2 5 5 0 0

In process (b/f) 1 9 1 1 3 7 5 5

Filed in the year 6 2 1 6 9 3 6

To t a l 2 5 3 2 9 1 6 8 1 1

S e t t l e d 1 4 2 3 2 4 3 6

In process (c/f) 1 1 9 7 1 2 5 5

P ro t e s t s

A p p e a l s

R P G TC o m p a n i e s

2 0 0 1

2 0 0 1 2 0 0 2 2 0 0 1 2 0 0 2

2 0 0 2 2 0 0 1 2 0 0 2 2 0 0 1 2 0 0 2

I n d i v i d u a l *

Income Ta x

Special Commissioner ofIncome Ta x

H i g hC o u rt

2 0 0 1 2 0 0 2

A p p e a lC o u rt

2 0 0 1 2 0 0 2

F e d e r a lC o u rt

OFFICIAL PROTESTS

APPEALS TO THE SPECIAL COMMISSIONER OF INCOME TAX AND THE COURT

* These include trusts, associations and part n e r s h i p s .


Business SurveyIn 2002, the LHDN made 484 visits to the premises of

26,638 taxpayers nationwide to raise awareness and

i m p rove compliance to laws, while broadening the tax

base. This is 46.27% higher than the 18,211 pre m i s e s

visited in 2001 from 503 visits made.

Tax AuditThe main purpose of the tax audit exercise, part i c u l a r l y

within the STS environment, is to improve voluntary

compliance with taxation laws and regulations by

taxpayers. A total of 1,850 tax audit cases were re s o l v e d ,

giving a total of RM77.03 million in taxes and penalties,

c o m p a red with RM51.25 million in the previous year. This

i m p rovement of 50.29% from 2001 is attributed to the

i n c rease in company cases audited, from 568 to 729

c a s e s .

I n v e s t i g a t i o nThe main purpose of the investigation exercise is to

reduce and prevent tax evasion activities and to punish

taxpayers who had intentionally committed those

o ffences or who were negligent when making financial

re p o rts on their taxation activities. In 2002, total taxes

and penalties earned from investigation activities totalled

RM386.49 million, with 656 cases re s o l v e d .

TAX AUDIT

INVESTIGATION

BUSINESS SURVEY

F a i l u re toS u b m i tR e t u rn

N o n -C o m p l i a n c eof Payment

N u m b e r s

I n c o m p l e t eR e c o rd

N e w l yR e g i s t e re d

F i l e s

2 0 0 0 2 0 0 1 2 0 0 2

Number ofP re m i s e s

Number of CasesA u d i t e d

Number of CasesF i n a l i s e d

Tax & Penalties(RM Million)

1 9 9 81 9 9 7 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

2 0 . 5 0

1 0 0 . 4 0

3 5 . 1 04 1 . 4 0

5 1 . 2 0

7 7 . 0 3

N u m b e rof Cases

Tax & Penalties(RM Million)

1 9 9 81 9 9 7 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2

5 0 9 . 8 0

3 6 2 . 1 0

4 0 7 . 4 0

4 2 8 . 2 0

3 9 7 . 3 03 8 6 . 4 9


COMMUNICATIONCustomer ServiceThe main purpose of the implementation of the customer

s e rvice program is to create tax awareness and knowledge

to taxpayers, future taxpayers, tax agents, employers and

the public, especially on taxpayers’ rights and

responsibilities. Existing activities will be enhanced, while

new activities will be introduced to reach and benefit the

t a rget groups.

Obtaining inform a t i o n

The LHDN provides facilities for taxpayers to

communicate, either by:

■ d i rect interaction at service counters at branches

nationwide, or

■ sending letters or e-mail from the website, or

■ phone call to the call centre .

In addition, the LHDN enhances dissemination of

i n f o rmation through seminars, talks, courses and

workshops organised throughout the year. The website,

also displays the latest information on taxation, while

s e rving as a facility to reach the LHDN and to downloadthe tax re t u rn. During 2002, a total of 2,124,182 people

visited our service counters. 636,467 of those visitors

w e re interviewed or had consulted the LHDN. Our website

was visited by 567,969 visitors and the LHDN call centre

received 6,494 calls and 1,081 interv i e w s .

WEBSITE AND E-MAIL FACILITIES

2,124,182

478,297

942,189

Number of Visitors at theCounters

Number of Letters /Faxs / E-mails

Number of PhoneCalls

Number of Vi s i t o r s

Number of Mails

2 0 0 0 2 0 0 1 2 0 0 2

3 , 1 9 0

4 , 9 4 4

5 , 4 4 8


TA X PAY E R SE RV I C E WE E K

2 0 0 0 5 6 5 7 3 , 0 5 4 1 0 2 , 3 3 9 4 6 1 , 8 0 6

2 0 0 1 7 2 6 7 9 , 5 7 4 1 1 9 , 2 3 0 1 0 6 3 , 0 5 2

2 0 0 2 8 8 7 8 0 , 5 3 6 1 1 1 , 4 3 8 7 2 3 , 4 6 7

N u m b e r Vi s i t o r S e rv i c e N u m b e r P a rt i c i p a n t

B r i e f i n g sC o u n t e rYe a r

To enhance the standard of counter service at branches, the

LHDN introduced the one-stop service counter, for the

convenience of taxpayers to make all needed transactions at

a single location. As at end 2002, 26 LHDN branches had set

up their own one-stop counters, with the counter at our

Jalan Duta Branch topping the rest at an average of 288

visitors per day.

C a l l s 1 , 4 1 1 6 , 4 9 4I n t e rv i e w s 3 6 1 , 0 8 1

To t a l 1 , 4 4 7 7 , 5 7 5

Type of Serv i c eN u m b e r

2 0 0 1 * 2 0 0 2

CA L L CE N T R E

* S e rvice for the first three months of implementation.


The LHDN also provides temporary counter facilities under

the annual Taxpayer Service Week (MPPC) programme. T h i s

y e a r’s MPPC programme held from 6 May 2002 to 12 May 2002

attracted 80,536 visitors and focused on payment by instalment

and individual tax calculation under the STS. A total of 887

t e m p o r a ry counters were opened at employers’ offices, at

shopping malls and at other strategic places.

To further increase awareness and voluntary compliance among

taxpayers, an education programme was also implemented

during the year, involving 476 talks, briefings and seminars, and

attended by 30,442 participants. The LHDN also broadcasted 19

i n f o rmation sessions on television and 33 sessions on radio.

Obtaining and sending re t u rn form s

A p a rt from posting tax re t u rn forms to all eligible taxpayers, the

LHDN also provides a facility to download a copy of the tax re t u rn

f o rm from its website, enabling taxpayers to send the completed

f o rm directly to the LHDN.

The annual deadline of 31 May for the re t u rn of the ITR for

individuals has been extended to 5 June 2002. The LHDN also

p rovides 65 special post boxes at shopping malls all over the

c o u n t ry and 10 more post boxes at post offices around the Klang

Va l l e y. In addition, counters at LHDN branches receive ITR fro m

taxpayers during office hours and also accept ITR sent by post.

Making payments

Taxpayers may make tax payments through their employers, by

mail, at payment counters, banks and bank portals electro n i c a l l y.

Collection AgentAs agent to the National Higher Education Fund

Corporation (PTPTN) in the collection of education loans

f rom former students who have completed their tert i a ry

educations, the LHDN has succeeded in collecting

RM12,439,220.69 from 14,781 borrowers as compared to

RM5,642,020.09 from 6,185 borrowers in 2001.

C o u rtesy: Y.Bhg. Dato’ Mohd. Nor Khalid (LAT )

3 7 , 5 6 8 . 5 6 4 , 9 1 3 . 8 9 1 2 . 9 2 1 , 8 2 8 . 9 4 4 4 , 3 2 4 . 3 1

Bank Counters(RM Million)

B i z - C h a n n e l(RM Million)

To t a l(RM Million)

O t h e r s(RM Million)

LHDN Counters and Mail(RM Million)

COLLECTION OF EDUCATION LOANS

N u m b e ro fB o rro w e r s

Amount of LoanRepayment (RM Million)

2 0 0 0 2 0 0 1 2 0 0 2

1 . 5 1

5 . 6 4

1 2 . 4 4

MODES OF PAYMENT OF TAXES

During 2002, while completing the final phase

of the STS system for company taxpayers, the

LHDN started developing a model of the non-

company STS, using the following appro a c h :

i . to adopt a concept almost similar to that of

the STS for company taxpayers;

i i . to adopt laws that are not very diff e re n t

f rom the existing laws, in terms of tax

management, tax calculation, and

e n f o rc e m e n t ;

i i i . to introduce laws and regulations that are

m o re transparent, as well as simplify work

p ro c e d u res and systems, in order to

minimise the burden of compliance (cost

and time) by taxpayers; and

i v. i n t e rest on legal offences will not be

i n t roduced, and instead, only the curre n t

penalty system will be adopted.


The implementation of the Self-Assessment System (STS)

for company taxpayers entered its second year, with the

LHDN receiving ITR for assessment year 2001 submitted

within six months (extended to eight months) from the

date of closure of accounts. Non-company taxpayers, i.e.

individuals, co-operatives, trusts, clubs, associations and

Hindu joint families, will adopt the STS from assessment

year 2004.

Under the STS, individual taxpayers are re q u i red to close their

business accounts on 31 December of each year and to

submit their ITR on or before 30 April the following year. Thus,

assessment year 2003 is the transition year for individual

taxpayers who had previously closed their business accounts

each year on dates other than 31 December.

DEVELOPMENT OF THE SELF-

ASSESSMENT SYSTEM

To date, the LHDN has provided relevant laws

involving amendments to the Income Tax Act, 1967,

t h rough Act A1151, which was gazetted on 23 May

2003. The STS components under implementation

a re :

i . development of regulations, work pro c e d u re s

and systems, including the design of a new tax

re t u rn form .

i i . development of a computerised infrastru c t u re

s y s t e m .

i i i . s t rengthening of the processes and pro c e d u re s

for audit work, business surv e y, and customer

s e rvice, and enhancement of related activities.

i v. enhancement of training and exposure of off i c e r s

on work pro c e d u res, processes and systems

under the STS.


Avoidance of DoubleTaxation Agre e m e n tOne of the LHDN’s major roles is to act as advisor to the

G o v e rnment on taxation-related matters. In this respect, the

LHDN gives continuous assistance to the Government in:

■ maintaining its tax base, to prevent national re v e n u e

outflow as a result of an imbalance in taxing rights, and

■ i n c reasing international trade and investment.

In 2002, 6 Double Taxation Agreements (DTAs) negotiations

w e re held, involving a first-round negotiation with Lebanon,

and second-round negotiations with Germ a n y, Seychelles,

N o rw a y, Saudi Arabia and Portugal. In total, 46 DTAs were

e n f o rced, 7 DTAs were signed and gazetted, 12 DTA s

concluded, and 14 DTAs still under negotiation.

Visits from DelegatesThe LHDN also received 5 courtesy visits cum study tour by

f o reign visitors, namely 6 officers from the State

Administration of Taxation, the People’s Republic of China;

8 officers from the Ministry of Finance, Socialist Republic of

Vietnam; 10 government officers from Pakistan; 4 off i c e r s

f rom the University of Switzerland; and 63 officers from the

Rajasthan Tax Consultants Association, India.

A rgentina (Limited Agre e m e n t )

A u s t r a l i aA u s t r i aB a h r a i nB a n g l a d e s hB e l g i u mC a n a d aC h i n aCzech RepublicD e n m a r kF i j iF i n l a n dF r a n c eG e rm a n yH u n g a ryI n d i aI n d o n e s i aI re l a n dI t a l yJapan (New Agre e m e n t )

J o rd a nM a l t aM a u r i t i u sM o n g o l i a

N e t h e r l a n d sNew ZealandN o rw a yP a k i s t a nPapua New GuineaP h i l i p p i n e sP o l a n dR o m a n i aR u s s i aSaudi Arabia (Limited Agre e m e n t )

S i n g a p o reSouth Kore aSri Lanka (New Agre e m e n t )

S w e d e nS w i t z e r l a n dT h a i l a n dTu r k e yUnited Arab EmiratesUnited Kingdom(New Agre e m e n t )

United States ofAmerica (Limited Agre e m e n t )

U z b e k i s t a nVi e t n a m

A l b a n i a

• E g y p t

• K y rg y z t a n

• M y a n m a r

• N a m i b i a

• S u d a n

• Z i m b a b w e

D T AS SI G N E D AN D GA Z E T T E D

D TAS IN FO R C E

INTERNATIONAL RELATIONS



MALAYSIA

• B ru n e i

• C ro a t i a

• India (New Agre e m e n t )

• I r a n

• K a z a k s t a n

• K u w a i t

• L u x e m b o u rg

• M o ro c c o

• O m a n

• S i n g a p o re(New Agre e m e n t )

• South Africa

• Sweden (New Agre e m e n t )

D TAS CO N C L U D E D

• B r a z i l• C h i l e

• Finland (New Agre e m e n t )

• G e rmany (New Agre e m e n t )

• L a o s• L e b a n o n• M e x i c o

• N o rw a y(New Agre e m e n t )

• P o rt u g a l

• Saudi Arabia

• S e y c h e l l e s

• S p a i n

• U ru g u a y

• Ve n e z u e l a

D TAS UN D E R NE G O T I AT I O N S


C o n f e rences, Seminars And Meetings

C o n f e rences / Seminars Ve n u e No. of S p o n s o rParticipants

Transfer pricing guidelines and exchange Chonan, Kore a 2 K o rea-OECD Multilateral

of information and bank secrecy seminar Tax Centre

36th CIAT confere n c e Quebec City, 3 C I AT

C a n a d a

6th general assembly of IOTA Riga, Latvia 3 I O TA

7th annual OECD conference

C I AT technical confere n c e Paris, France 6 OECD / CIAT

32nd SGATAR confere n c e T h a i l a n d 8 S G ATA R

8th International tax confere n c e Havana, Cuba 2 The National Office of

Tax Administration

Republic of Cuba

2 3 rd CATA technical confere n c e Cape Town, 6 C ATA

South Africa

M e e t i n g s Ve n u e No. of S p o n s o rP a rt i c i p a n t s

OECD business profits TA G Washington D.C., 1 OECD

U S A

Heads of training institution APN, Bangi 1 S G ATA R

of SGATAR members M a l a y s i a

C ATA perf o rmance evaluation London, UK 3 C ATA

C ATA committee management London, UK 3 C ATA

C I O TA Quebec City, 3 C I O TA

C a n a d a

4th SGATAR working level Tokyo, Japan 2 S G ATA R

N o t e s :

O E C D - O rganisation for Economic Co-operation and Development

C ATA - Commonwealth Association of Tax Administrators

C I AT - I n t e r-American Centre of Tax Administrations

I O TA - I n t r a - E u ropean Organisation of Tax Administrations

C I O TA - Committee of International Organisations on Tax Administration

TA G - Technical Advisory Gro u p

S G ATA R - Study Group on Asian Tax Administration and Researc h

CO R P O R AT EC U LT U R E

TO WARDS ACHIEVING THE


totally be performed automatically upon receipt of the tax

returns. With regard to the communications system, it will

enable taxpayers to use the internet to submit their tax

returns through e-filing, make tax payments through e-

payment, and obtain information or make inquiries through

the website. However, rates of literacy of inform a t i o n

technology in the daily lives of Malaysians are still low. In view

of this, the LHDN has to diversify its services to cater to the

heterogeneous needs of the taxpaying community, instead of

focussing solely on services based on information technology.

Among facilities and services provided are:

■ Customer Service Centre – provides assistance as required

by customers,

■ Processing Centre – offers convenience in submitting tax

returns,

■ Decentralisation of collection activities – simplifies the

checking of tax status by taxpayers, and

■ Call Centre – attends to enquiries by internal and external

customers on STS issues.

Efficient and Effective Management

The LHDN is committed to efficiently and eff e c t i v e l y

administer taxation laws entrusted upon it to achieve

collection targets without burdening taxpayers with high

compliance costs. This commitment and the objectives are

realised by modernising work systems and pro c e s s e s ,

efficiently providing the necessary service to customers, and

optimising the distribution of resources.

Among the initiatives being emphasised is the application of

information technology, which not only speeds up work

processes and optimises administration expenses, but also

provides convenience, to taxpayers in particular, and to the

public in general, in getting the necessary serv i c e s .

Development of communication and processing systems for

collection, audit, investigation and customer service activities

under the STS are completely based on inform a t i o n

t e c h n o l o g y. Once the activity-processing system is fully

completed in 2005, tax refunds and audit case selections can


Establishing a P rofessional Wo r k f o rc e

The LHDN is continually reviewing its human resource strategy

with the objectives of providing more efficient and effective

service to its customers and achieving its revenue collection

target by optimising the capabilities of the existing workforce.

Currently, the LHDN employs 6,830 officers to satisfy the

needs of more than 4.6 million registered taxpayers, 257,300

registered employers, and to process 8.87 million stamping

documents, resulting in a total collection of RM44.324 million

in taxes and duties, or 53.07% of the Federal Government’s

CO U R S E S W I T H I N T H E CO U N T RY

C a t e g o ry of Courses C a t e g o ry of Part i c i p a n t s No. of Part i c i p a n t sTypes of Tr a i n i n g

I n - s e rvice General and specific induction Executive Officer and Assistant Executivet r a i n i n g O ff i c e r 2 9 5

Law and accounting Executive Off i c e r, Assistant Executive Off i c e rand Adminsitrative Assistants 8 1 3

Skills and self- Te c h n i c a l Executive Officer and Assistant Executive Off i c e r 7 6 5development training

Customer serv i c e Executive Off i c e r, Assistant Executive Off i c e rand Administrative Assistants 1 4 9

M a n a g e m e n t All staff 3 , 0 0 6

I n f o rmation technology Executive Off i c e r, Assistant Executive Off i c e rand Administrative Assistants 1 6 2

■

■


revenue. These officers also assist the National Higher

Education Fund Corporation (PTPTN) in collecting repayments

of education loans from students who have completed their

studies, totalling RM12.439 million from the management

of 19,019 loan accounts.

In order to provide outstanding service and to continuously

fulfil customers’ needs and stakeholders’ demands, the

LHDN needs a skilled, committed, dedicated and disciplined

w o r k f o rce to carry out the duties assigned to them. The

quality of human re s o u rces is constantly being improved to

keep up with increasingly sophisticated requests and

demands. Human re s o u rce excellence is achieved thro u g h :

■ p rovision of training and exposure,

■ p rovision of a conducive working enviro n m e n t ,

■ o ffer of monetary incentives and morale boosting

■ p rovision for the welfare of the officers and their

families, and

■ p rovision of co-curricular activities

Training and ExposureE v e ry officer is given training and retraining either locally or

a b road. In 2002, the LHDN conducted 143 diff e rent courses

within the country to:

■ c o n f i rm appointments of service, and

■ i n c rease skill levels in selected areas of work.

The LHDN also sent 79 officers for training overseas. In

2002, the LHDN held an average of 15.79 hours of training

per off i c e r.

Conducive Working Enviro n m e n t

The LHDN aims to eventually operate in its own off i c e

building or space at every branch and centre throughout the

c o u n t ry. A comfortable working environment is a catalyst

for pro d u c t i v i t y. Offices are renovated and old furn i t u re

replaced for the added comfort of staff in perf o rming their

duties at work. A more comfortable working enviro n m e n t

will bring satisfaction to staff and taxpayers when dealing

with the LHDN.

■ Tax treaty negotiation Hong Kong 1 Inland Revenue Department, Hong Kong and OECD

■ Taxation of electronic commerce, and Chonan, Kore a 4 O E C D■ Taxation of financial instru m e n t s

■ Commonwealth tax inspectors, and London, UK 3 Inland Revenue UK and CATA■ Advancing management potential

■ General tax administration course APN, Bangi, Malaysia 2 6 Malaysian Technical CooperationM a l a y s i a

■ Taxation of international transactions, and APN, Bangi, Malaysia 5 1 O E C D■ Transfer pricing

■ Money laundering methods and typologies Va n c o u v e r, Canada 2 Asia Pacific Group and The Royal Canadian Mounted Police

Ve n u eNo. of

P a rt i c i p a n t s S p o n s o rCourses / Wo r k s h o p s

IN T E R N AT I O N A L CO U R S E S A N D WO R K S H O P S


In 2002, the LHDN spent RM86 million to:

■ provide more comfortable offices, through the purchase

of land and buildings,

■ supply the latest office facilities and equipment for work

efficiency and effectiveness,

■ renovate and upgrade counters to create a friendlier

environment for customers, and

■ provide a communications and processing system based

on information technology.

Staff Acknowledgement

The LHDN motivates and acknowledges its staff in the forms

of bonus, salary increments and promotions to raise levels of

efficiency and work ethics, and at the same time develop

efficient and dedicated employees. The year 2002 saw 268

officers receiving salary increments of 8%, 402 with 7%

i n c rements and 5,848 with 2% to 6% incre m e n t s .

Outstanding workers are rewarded with a bonus of 1 or 1/2

month’s salary, plus an annual increment of 8% or 7%.

Social, sports and welfare

Where required, the LHDN offers opportunities and facilities

to hone talents in sports, arts, drama, culture and other areas

involving group activities, which are instrumental in building

team spirit and esprit de corps among members,

subsequently developing virtuous personalities.

In 2002, the LHDN spent RM86 million to:

■ provide more comfortable offices, through the purchase

of land and buildings,

■ supply the latest office facilities and equipment for work

efficiency and effectiveness,

■ renovate and upgrade counters to create a friendlier

environment for customers, and

■ provide a communications and processing system based

on information technology.

Staff Acknowledgement

The LHDN motivates and acknowledges its staff in the forms

of bonus, salary increments and promotions to raise levels of

efficiency and work ethics, and at the same time develop

efficient and dedicated employees. The year 2002 saw 268

officers receiving salary increments of 8%, 402 with 7%

i n c rements and 5,848 with 2% to 6% incre m e n t s .

Outstanding workers are rewarded with a bonus of 1 or 1/2

month’s salary, plus an annual increment of 8% or 7%.

Social, sports and welfare

Where required, the LHDN offers opportunities and facilities

to hone talents in sports, arts, drama, culture and other areas

involving group activities, which are instrumental in building

team spirit and esprit de corps among members,

subsequently developing virtuous personalities.

PR O M O T I O N S AC C O R D I N G T O CAT E G O R I E S

4%

90%

4%2%

SeniorManagement

Technical

InformationTechnology

Administration / Finance

Co-curriculum

Establishing the Wataniah (Vo l u n t a ry Army) corps, Civil

Defence Department (JPA3), Voluntary Fire & Rescue and

Taekwon-Do teams instil positive values, build discipline,

leadership and team spirit, which consequently develop

responsible, committed and professional employees who

improve an organisation’s performance.

Success in implementing the STS is mainly dependent on the

level of voluntary compliance with taxation laws and

regulations by the taxpaying community. It is therefore the

LHDN’s mission to raise the level of voluntary compliance

among taxpayers without burdening them with high

compliance costs. The STS education and aware n e s s

programmes are designed such that taxpayers;

■ are able to understand taxation laws and regulations,

■ know how to keep documents and activity records,

■ know how to prepare activity accounts

■ know how to complete tax returns,

■ know how to calculate the tax amount payable, and

■ are aware of their rights and responsibilities as taxpayers,

without requiring the assistance of tax practitioners or agents,

who may increase compliance costs.


Improving VoluntaryCompliance


In this regard, the LHDN has held 476 talks, briefings and

workshops for 30,442 taxpayers as well as tax

practitioners and agents nationwide. In addition,

information was also disseminated through:

■ radio and television,

■ website,

■ distribution of booklets, leaflets and notes, and

■ meetings with individuals.

The LHDN has also held dialogues with trade unions and

p rofessional bodies in the fields of taxation and

accounting, such as the MIA*, the MIT*, MICPA * ,

MAICSA* and the MATA*, compounding the effect when

this dissemination of taxation knowledge and information

is forwarded to their respective members.

T h rough continuous improvement in its audit and

business survey activities LHDN hopes to ensure that

taxpayers:

■ keep all relevant documents and records,

■ prepare correct accounts,

■ p re p a re income and expenditure re p o rts in

compliance with laws and regulations,

■ submit forms for assessment and payment within the

prescribed period,

■ settle taxes for themselves and their workers within the

prescribed period, and

■ do not repeat the same mistakes.

During 2002, the LHDN carried out tax audits on 1,850 cases,

resulting in a collection of RM77.03 million in taxes and

penalties. Additionally, the LHDN also made 484 visits to

perform business surveys at 26,638 taxpayers’ premises.

C o u rtesy: Y.Bhg. Dato’ Mohd. Nor Khalid (LAT )

* N o t e :

M I A - Malaysian Institute of AccountantsM I T - Malaysian Institute of Ta x a t i o nM I C PA - The Malaysian Institute of Certified Public AccountantsM A I C S A - The Malaysian Association of the Institute of Chart e red Secretaries and AdministrationsM ATA - Malaysian Association of Tax Accountant

DI A RYCO R P O R AT E


Hari Raya With The Prime MinisterY.A.B. Dato’ Seri Dr. Mahathir bin Mohamad

Y.A.B. Dato’ Seri Dr. Mahathir bin Mohamad chatted with the LHDN officers who were donating blood.

Y.A.B. Dato’ Seri Dr. Mahathir bin Mohamad was given a tour of the National Tax Academy.

Line inspection by Y.A.B. Dato’ Seri Dr. Mahathir bin Mohamad.

Tree planting ceremony to commemorate the Hari RayaGathering With The Prime Minister.

The submission of the Letter of Undertaking by Y. Bhg. Dato’ Zainol Abidin bin Abd. Rashid to

Y.A.B. Dato’ Seri Dr. Mahathir bin Mohamad.

20 December 2002

L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A 1 3 41 3 4

6 May 2002

An invited guests, Mr. Rashid bin Dato’ Sidek (former national badmintonplayer) took the opportunity to submit his tax re t u rn at one of the one-stopc e n t res, witnessed by Y. B. Dato’ Chan Kong Choy, Deputy Finance Minister ofM a l a y s i a .

25 May 2002

Hj. Mustaffa bin Ibrahim, an Executive Officer from the Kuala LumpurAssessment Branch (Jln. Duta) received the award of Tokoh Maulidur Rasulf rom the Seri Paduka Baginda Yang Di Pertuan Agong on the occasion of theNational Level Maulidur Rasul 2002 celebrations.

6 – 12 May 2002

One of the temporary counters opened at a shopping centreduring the weeklong nationwide Taxpayers’ Service Week (MPPC).

6 Febru a ry 2002

O fficial visit to the office of the Governor of Penang, Tun Dato’Seri Haji Abdul Rahman bin Haji Abbas by the Penang BranchD i rector and the Bukit Mertajam Branch Dire c t o r.

21 January 2002

A g reement to appoint Public Bank Bhd. and Public Finance Bhd.as tax collection agents, signed by the Y. Bhg. Dato’ ChiefExecutive of the LHDN and the Executive Director of Public BankBhd., witnessed by Y. B. Dato’ Chan Kong Choy, Deputy FinanceMinister of Malaysia.


20 October 2002

Visit by the Y.A.B Chief Minister of Selangor to the LHDN’sexhibition site in Klang during the K3P Mesra Rakyat Pro g r a m m eat Kampung Delek, Selangor.

31 October 2002

The Lembaga Hasil Recreation Club of Muar, Johor organised aBlood Donation Drive

17 August 2002

The Teluk Intan Branch Family Day celebration was held at theTeluk Rubiah Golf and Country Resort, Manjung, Perak, attendedby the Y. Bhg. Dato’ Chief Executive of the LHDN.

16 July 2002

Delegates from Commonwealth Countries posed in a photosession with the Deputy Director General (Operations andI n f o rmation Technology) during a visit to the LHDN office in BukitM e rt a j a m .

12 June 2002

Business Survey operations conducted around Kuala Te re n g g a n uinvolved officers from branches in the Klang Va l l e y, Kota Bharuand Kuala Te re n g g a n u .

28 October 2002

Winners of the nationwide inter-school essay writing competitionin a photo session with Y. B. Dato’ Chan Kong Choy andY. Bhg. Dato’ Chief Executive of the LHDN.

LE G I S L AT I O NCHANGES TO


On 20 September 2002, the Honorary Prime Minister cum

Finance Minister presented the 2003 Budget. Following this,

provisions of several laws were proposed for amendment.

Income Tax

■ Non-resident individuals are no longer required to be

physically present in Malaysia at year-end (31 December)

and at the beginning of the year (1 January) to qualify as

tax residents of Malaysia.

■ Income derived from the occupancy of premises for non-

business purposes is no longer subject to tax.

■ Service fees paid to non-residents are considered earned

in Malaysia if the service concerned was provided in

Malaysia.

■ Income from Labuan off s h o re business activity by

Malaysian offshore banks is not subject to tax.

■ S e rvice fees received by operational headquart e r s

companies are tax-exempted for 10 years.

■ Company directors shall be liable in settling company

income taxes in the event the company fails to do so.

■ Taxpayers are required to keep all records and documents

for 7 years.

■ The withholding tax rate for non-resident contractors is

reduced:

- from 15% to 10% on the contract payment, and

- from 5% to 3% on payment made to employees.

■ The Director General of Inland Revenue is empowered to

remit penalties for failure to settle taxes on company-

declared dividends.

■ Under the STS, notice of refund considered delivered to

taxpayers on the day of submission of tax returns.

■ The income tax rates for companies with paid-up ordinary

share capital not exceeding RM2.5 million are:

- reduced to 20% on the taxable income not exceeding

RM100,000, and

- 28% of the portion of taxable income exceeding

RM100,000.

■ The Finance Minister is empowered to determine if a

building is an industrial building and the amount of

capital allowance it is entitled to.

■ The previous deadline of 31 December 2003 to apply for

tax incentives for food production projects is extended to

31 December 2005.

■ Income tax exemption on compensation for loss of

employment received is raised from RM4,000 to RM6,000

for each completed year of service.

■ Interest earned from investment in approved securities,

bonds or debentures is tax-exempted.

■ The reinvestment allowance incentive currently given to

companies is extended to individuals (including

partnerships) that transform their poultry farm systems

from an opened house system to a closed house rearing

system.

■ The incentives given to companies involved in the

investment of food production projects are extended to

include such involvements in deep-sea fishing.

■ The write-off period for capital allowance of approved

capital expenditure (plant and machinery) incurred for

energy-conserving purposes is accelerated from 3 years to

1 year.

■ Capital expenditure incurred on the drafting of the

Corporate K-Based Economic Master Plan is deductible in

the calculation of income tax.

BUDGET 2003


■ Expenditure incurred on the issuance of private debt

securities based on Islamic principles will be allowed as a

deduction in tax calculations from assessment years 2003

to 2007.

■ The double deduction given on expenses incurred to

promote the export of professional services is extended to

individuals (including partnerships).

■ The costs incurred by local owned companies acquiring

high-technology foreign owned companies abroad are

given an annual allowance deduction of 20% of the cost

of the acquisition.

■ Buildings used as approved care centres for old folks are

given an industrial building allowance of 10% per annum

of the costs incurred in the construction or purchase of

the building.

■ Plantation companies that switch their crops to rubber

trees are given an incentive allowance of 100% on the

capital expenditure incurred for the preparation of land,

planting and crop maintenance.

■ Companies that invest in a fully-owned subsidiary

involved in the approved management consolidation of

smallholders or idle land are granted tax deductions

equivalent to the amount of investment.

■ Statutory income earned by regional distribution centres is

tax-exempted for 10 years.

■ The incomes of trade officers working at operational

headquarters companies or representative offices are

subject to tax only on the portions of their salaries earned

during their stay in Malaysia.

Stamp Duty

■ The penalty for late remittance of stamp duties by banks,

stock brokers or insurance companies to the LHDN is

reduced from RM500 to RM200, or 10% of the payable

amount, whichever is higher.

■ The penalty rates for late stamping are amended as

follows:

- RM25 or 5% of the unpaid duty outstanding for a

duration of less than 3 months,

- RM50 or 10% for late stamping of between 3 to 6

months, and

- RM100 or 20% for late stamping of more than 6

months.

■ Serviced property rental agreement letters are subject to

the same rate of duty as rental agreements of non-

serviced property.

■ Stamp duty is exempted for all purchase agreement

instruments (including asset purchases) executed under

the Syariah law for renewal of Islamic revolving financing

facility.

■ Stamp duty on immovable property transfer instruments

not involving any consideration, but based only on love

and affection, is remitted by 50 percent.

Labuan Offshore Business Activity Tax

■ Income earned by partnerships re g i s t e red with the

"Labuan Offshore Limited Partnerships Act, 1997" and

offshore branches of Malaysian banks in Labuan are

assessed and taxed under the LOBATA.

FINANCIALSTATEMENTSCertificate of the Auditor General.......................... 140

Statement by the Chairman anda Member of the Inland Revenue Board .............. 141

Declaration by the Officer Primarily Responsible for the Financial Managementof the Inland Revenue Board ............................... 142

Balance Sheet .........................................................143

Income Statement ................................................. 144

Statement of Changes in Equity............................. 145

Cash Flow Statement............................................. 146

Notes to the Account ............................................ 147

L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A ■ 140

CERTIFICATE OF THE AUDITOR GENERALON THE FINANCIAL STATEMENTS OF THEINLAND REVENUE BOARD OF MALAYSIA

FOR THE YEAR ENDED 31 DECEMBER 2002

The financial statements of the Inland Revenue Board of Malaysia for the year ended 31 December 2002 have been audited by my

representative. These financial statements are the responsibility of the management. My responsibility is to audit and to express an opinion

on these financial statements.

2. The audit has been carried out in accordance with the Audit Act 1957 and in conformity with approved auditing standards. Those

standards require that an audit be planned and performed to obtain reasonable assurance about whether the financial statements are free

of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing the accounting principles used as well as evaluating the overall financial statement presentation.

3. In my opinion, the financial statements give a true and fair view of the financial position of the Inland Revenue Board of Malaysia

as at 31 December 2002 and of the results of its operations and its cash flows for the year then ended based on the approved accounting

standards.

(DATUK DR. HADENAN BIN ABD. JALIL)

for AUDITOR GENERAL OF

MALAYSIA

PUTRAJAYA

20 AUGUST 2003

FIN

AN

CIA

L S

TAT

EM

EN

TS

Signed

(TRANSLATION)

L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A ■ 141 FINA

NC

IAL S

TAT

EM

EN

TS

Statement by the Chairman and a Member of theInland Revenue Board

We, TAN SRI DR. SAMSUDIN BIN HITAM and DATUK SITI MASLAMAH BINTI OSMAN being the Chairman and one of the

Members of the INLAND REVENUE BOARD OF MALAYSIA, do hereby state that, in the opinion of Members, the accompanying

Balance Sheet, Income Statement, Statement of Changes in Equity and Cash Flow Statement, together with the enclosed notes are

drawn up so as to give a true and fair view of the state of affairs of the INLAND REVENUE BOARD OF MALAYSIA as at 31 December

2002 and of their results and changes in financial position for the year ended on that date.

On behalf of the Board,

Name : TAN SRI DR. SAMSUDIN BIN HITAM DATUK SITI MASLAMAH BINTI OSMAN

Title : CHAIRMAN MEMBER OF

INLAND REVENUE BOARD INLAND REVENUE BOARD

Date : 28 APRIL 2003 28 APRIL 2003

Place : KUALA LUMPUR KUALA LUMPUR

L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A ■ 142FI

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Declaration Signed by the Officer Primarily Responsible for the Financial Management of the Inland Revenue Board

I, ZAKARIA BIN A. SAMAD the officer primarily responsible for the financial management of the INLAND REVENUE BOARD

OF MALAYSIA, do solemnly and sincerely declare that the accompanying Balance Sheet, Income Statement, Statement Of

Changes In Equity and Cash Flow Statement, together with the enclosed notes, to the best of my knowledge and belief, are

correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the

Statutory Declaration Act, 1960.

Subscribed and solemnly declared )

by the abovenamed at )

Kuala Lumpur )

25 APRIL 2003 ) ZAKARIA BIN A. SAMAD

Before me,

COMMISSIONER FOR OATHSMOHD NOAR IBRAHIMPESURUHJAYA SUMPAH

LEMBAGA HASIL DALAM NEGERIKUALA LUMPUR


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Balance SheetAs At 31 December 2002

2002 2001

Notes RM RM

FIXED ASSETS 3 226,521,089 187,608,190

LOANS TO EMPLOYEES 4 15,546,523 16,766,956

242,067,612 204,375,146

CURRENT ASSETS

Deposit And Prepaid 5 163,511 403,825

Loans to Employees 4 4,939,485 4,894,881

Payment Of Advances 6 18,605,745 9,066,909

Accrued Interest 378,248 32,658

Fixed Deposits And Short Term Investment 7 56,000,000 51,227,575

Cash And Bank Balances 10,435,265 5,141,341

TOTAL CURRENT ASSETS 90,522,254 70,767,189

CURRENT LIABILITIES

Sundry Creditors 8 18,270,128 11,436,119

Terms Loan 9 11,237,500 10,301,042

Provision For Audit Fee 109,636 45,636

TOTAL CURRENT LIABILITIES 29,617,264 21,782,797

NET CURRENT ASSETS 60,904,990 48,984,392

TOTAL NET ASSETS 302,972,602 253,359,538

FUNDED BY:

Development Fund 10 167,876,771 98,833,129

Trust Fund 11 880,823 704,224

Other Fund 12 36,000,000 36,000,000

Accumulated Surplus / (Deficits) 13 29,853,550 36,307,179

234,611,144 171,844,532

LONG TERM LIABILITIES AND DEFERRED INCOME

Terms Loan 9 68,361,458 79,598,958

Deferred Income 14 – 1,916,048

68,361,458 81,515,006

302,972,602 253,359,538

The accompanying notes to the accounts on pages 147 to 155 are an integral part of these accounts.


Income StatementFor The Year Ended 31 December 2002

2002 2001

Notes RM RM

Revenue 15 531,859,716 343,711,094

Other Operating Income 56,247 4,895

Staff Cost 16 (377,946,870) (241,023,529)

Depreciation Of Land, Furniture And Equipment (44,437,729) (20,781,710)

Other Operating Expenditure (116,023,292) (97,028,994)

Surplus / (Deficit) From Operations (6,491,928) (15,118,244)

Finance Cost (5,891,286) (396,545)

Income From Investment And Loans 5,929,585 5,633,701

Current Surplus / (Deficit) Of Income (6,453,629) (9,881,088)


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Stat

emen

t o

f C

han

ges

in E

qu

ity

For

The

Year

End

ed 3

1 D

ecem

ber

2002

Dev

elop

men

tTr

ust

Oth

er

Acc

umul

ated

Fund

Fund

Fund

Surp

lus

/

(Def

icit

)To

tal

RMRM

RMRM

RM

Bala

nce

as a

t 1s

t Ja

nuar

y 20

0199

,108

,289

651,

258

36,0

00,0

0047

,519

,155

183,

278,

702

Cur

rent

Sur

plus

/ (D

efic

it)(2

75,1

60)

52,9

66–

(9,8

81,0

88)

(10,

103,

282)

Prio

r Ye

ar A

djus

tmen

t–

––

(1,3

30,8

88)

(1,3

30,8

88)

(275

,160

)52

,966

–(1

1,21

1,97

6)(1

1,43

4,17

0)

Bala

nce

as a

t 31

Dec

embe

r 20

0198

,833

,129

704,

224

36,0

00,0

0036

,307

,179

171,

844,

532

Cur

rent

Sur

plus

/ (D

efic

it)69

,043

,642

176,

599

–(6

,453

,629

)62

,766

,612

Prio

r Ye

ar A

djus

tmen

t–

––

––

69,0

43,6

4217

6,59

9–

(6,4

53,6

29)

62,7

66,6

12

Bala

nce

as a

t 31

Dec

embe

r 20

0216

7,87

6,77

188

0,82

336

,000

,000

29,8

53,5

5023

4,61

1,14

4

The

acco

mpa

nyin

g no

tes

to t

he a

ccou

nts

on p

ages

147

to

155

are

an in

tegr

al p

art

of t

hese

acc

ount

s.


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Cash Flow StatementFor The Year Ended 31 December 2002

2002 2001

Notes RM RM

CASH FLOW FROM OPERATING ACTIVITIES

Annual Fee And Other Income Received 17 532,156,277 343,403,538

Payment To Suppliers And Employees 18 (487,072,153) (341,242,683)

NET CASH FROM OPERATING ACTIVITIES 45,084,124 2,160,855

CASH FLOW FROM INVESTING ACTIVITIES

Purchasing Of Land, Furniture And Equipment (83,350,628) (97,078,422)

Income From Investment And Loans 5,583,995 5,840,385

NET CASH FROM INVESTING ACTIVITIES (77,766,633) (91,238,037)

CASH FLOW FROM FINANCING ACTIVITIES

Development Fund 69,043,642 (275,160)

Trust Fund 176,599 52,966

Terms Loan (10,301,042) 89,900,000

Deferred Income (1,916,048) (1,916,049)

Staff Loan 1,175,829 (7,861,032)

Payment Of Advance (9,538,836) (5,277,057)

Finance Cost Paid (5,891,286) (396,545)

NET CASH FROM FINANCING ACTIVITIES 42,748,858 74,227,123

Net Increase / (Decrease) In Cash 10,066,349 (14,850,059)

Cash And Cash Equivalents At The Beginning Of The Period 56,368,916 71,218,975

Cash And Cash Equivalents At The End Of The Period 66,435,265 56,368,916



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Notes to the AccountFor The Year Ended 31 December 2002

1. PRINCIPAL ACTIVITIES

Inland Revenue Board (IRB) was incorporated on 1st March 1996 under INLAND REVENUE BOARD OF MALAYSIAACT 1995, (Act 533).

The Board acts as an agent to the government in providing services related to the administration, assessment,collection of and enforcement on the payment of income tax, tax on income from petroleum, real property gaintax, estate duty and stamp duty.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1. Basis of Accounting

The accounts have been prepared under the historical cost convention and in accordance to the approvedaccounting standard.

2.2. Fixed Assets

Fixed Assets Policy has been approved by the Board Members on 28 November 2002. Implementation of thispolicy shall commence on 1 January 2002 for the preparation of Financial Statement 2002. Following are thechanges:

i. Fixed Asset which cost not less than RM1,000.00 per unit shall be capitalised. However carpet, curtain and relateditems acquired irrespective the cost shall not be capitalized.

ii. Any asset purchase which cost less than RM1,000.00 per unit including carpet, curtain and related items acquiredirrespective the cost shall be treated as current year expenses.

iii. Computer equipment has been re-categorised as computer, formerly categorised as office equipment.

iv. Renovation expense has been re-categorised as renovation, formerly categorised as building and buildingmaintenance.

2.3. Depreciation

All fixed assets are accounted for at cost. Freehold Land is not depreciated. In 2002, depreciation rate forcomputer has been changed to 33.33% compared to 20% of previous years whereas the depreciation forrenovation is shown separately from building at the same rate i.e. 20%. Depreciation is calculated based on astraight-line basis through out the estimated useful lives of the assets.

Rates of depreciation for fixed assets per year are as follows :-

Type of Fixed Assets Depreciation Rate

Land - Leasehold Period of lease

Building 2%

Equipment 20%

Furniture and Fitting 20%

Vehicle 20%

Renovation 20%

Computer 33.33%

2.4. Recognition On Interest Income

Interest income from Conventional Saving Scheme is recognised on the accrual basis while profit from Al-Mudharabah isrecognised as an income when the profit is received.

2.5. Foreign Currencies Conversion

Income Statement items are exchanged at rates prevailing on transaction dates. Exchange differences are included inIncome Statement.

2.6. Cash And Cash Equivalents

Cash and cash equivalents in the Cash Flow Statement have been prepared based on the Direct Method. Cash and cashequivalents comprise of short term investments, fixed deposits and cash.

L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A ■ 148N

ote

s to

th

e A

cco

un

tFo

r Th

e Ye

ar E

nded

31

Dec

embe

r 20

02

Land

Build

ings

Equi

pmen

tsFu

rnit

ure

&Ve

hicl

esFa

cilit

ies

Oth

er F

ixed

Re

nova

tion

sCo

mpu

ters

Tota

l

Fitt

ings

Ass

ets

RMRM

RMRM

RMRM

RMRM

RMRM

Cost

:

1 Ja

nuar

y 20

0217

,786

,322

117,

818,

350

138,

831,

342

15,5

90,6

419,

443,

115

1,84

8,78

01,

571,

733

––

302,

890,

283

Add

:Pu

rcha

ses

19,0

97,1

2029

,812

,800

1,92

0,93

074

6,96

11,

567,

777

––

2,39

0,03

431

,185

,673

86,7

21,2

95

Less

:D

ispos

als

––

(91,

236)

(53,

269)

(126

,504

)–

(300

)–

(1,5

80)

(272

,889

)

Less

:A

djus

tmen

t–

(11,

477,

660)

(117

,313

,106

)(1

0,18

4,20

8)11

5,19

9(1

,848

,780

)(1

,571

,433

)13

,322

,286

117,

255,

575

(11,

702,

127)

31 D

ecem

ber

2002

36,8

83,4

4213

6,15

3,49

023

,347

,930

6,10

0,12

510

,999

,587

––

15,7

12,3

2014

8,43

9,66

837

7,63

6,56

2

Dep

reci

atio

n:

1 Ja

nuar

y 20

0251

0,04

88,

410,

217

84,8

93,2

8612

,742

,524

6,59

3,65

478

2,37

41,

349,

990

––

115,

282,

093

Add

:D

efer

red

Inco

me

Cha

rges

––

––

––

––

1,90

1,04

81,

901,

048

Add

:C

urre

nt C

harg

es77

8,00

23,

464,

318

1,82

6,44

454

7,83

71,

121,

460

––

2,64

8,10

934

,051

,559

44,4

37,7

29

Less

:D

ispos

als

––

(90,

855)

(32,

940)

(126

,502

)–

(299

)–

(1,5

79)

(252

,175

)

Less

:A

djus

tmen

t–

(5,2

67,9

46)

(69,

108,

048)

(9,1

18,8

45)

115,

292

(782

,374

)(1

,349

,691

)5,

760,

916

69,4

97,4

74(1

0,25

3,22

2)

31 D

ecem

ber

2002

1,28

8,05

06,

606,

589

17,5

20,8

274,

138,

576

7,70

3,90

4–

–8,

409,

025

105,

448,

502

151,

115,

473

NBV

as

at 3

1 D

ecem

ber

2002

35,5

95,3

9212

9,54

6,90

15,

827,

103

1,96

1,54

93,

295,

683

––

7,30

3,29

542

,991

,166

226,

521,

089

Not

es: N

BV =

Net

Boo

k Va

lue

3.FI

XED

ASS

ETS

3.1

FIX

ED A

SSET

S 20

02

FIN

AN

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L S

TAT

EM

EN

TS

L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A ■ 149N

ote

s to

th

e A

cco

un

tFo

r Th

e Ye

ar E

nded

31

Dec

embe

r 20

02

Land

Build

ings

Equi

pmen

tFu

rnit

ure

Vehi

cles

Faci

litie

sO

ther

Reno

vati

ons

Com

pute

rsTo

tal

& F

itti

ngs

Fixe

d A

sset

s

Cost

:

1 Ja

nuar

y 20

0115

,528

,822

38,8

93,4

3712

3,96

0,16

012

,448

,567

8,22

4,57

91,

237,

867

1,62

0,83

7–

–20

1,91

4,26

9

Add

:Pu

rcha

ses

2,25

7,50

078

,950

,501

14,9

10,1

573,

192,

444

1,22

4,58

262

0,65

349

,339

––

101,

205,

176

Less

:D

ispos

als

––

(38,

585)

(41,

724)

(6,0

46)

(9,7

40)

(1,9

00)

––

(97,

995)

Less

:A

djus

tmen

t–

(25,

588)

(390

)(8

,646

)–

–(9

6,54

3)_

_(1

31,1

67)

31 D

ecem

ber

2001

17,7

86,3

2211

7,81

8,35

013

8,83

1,34

215

,590

,641

9,44

3,11

51,

848,

780

1,57

1,73

3–

–30

2,89

0,28

3

Dep

reci

atio

n:

1 Ja

nuar

y 20

019,

281

5,47

5,49

768

,030

,143

10,1

94,2

975,

182,

019

495,

603

1,21

5,95

1–

–90

,602

,791

Add

:D

efer

red

Inco

me

Cha

rges

––

1,91

6,04

9–

––

––

–1,

916,

049

Add

:C

urre

nt C

harg

es12

0,05

92,

936,

074

13,1

94,8

032,

588,

423

1,41

7,67

929

6,51

022

8,16

2–

–20

,781

,710

Less

:D

ispos

als

––

(36,

948)

(41,

720)

(6,0

44)

(9,7

39)

(1,8

98)

––

(96,

349)

Less

:A

djus

tmen

t38

0,70

8(1

,354

)1,

789,

239

1,52

4–

–(9

2,22

5)–

–2,

077,

892

31 D

ecem

ber

2001

510,

048

8,41

0,21

784

,893

,286

12,7

42,5

246,

593,

654

782,

374

1,34

9,99

0–

–11

5,28

2,09

3

NBV

as

at 3

1 D

ecem

ber

2001

17,2

76,2

7410

9,40

8,13

353

,938

,056

2,84

8,11

72,

849,

461

1,06

6,40

622

1,74

3–

–18

7,60

8,19

0

Not

es: N

BV =

Net

Boo

k Va

lue

3.2

FIX

ED A

SSET

S 20

01

FINA

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TAT

EM

EN

TS


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4. LOANS TO EMPLOYEES

2002 2001

RM RM

Conveyance Loan 14,033,790 15,254,494

Computer Loan 1,512,733 1,512,462

15,546,523 16,766,956

Total payments for Conveyance Loan and Computer Loan within 12 months

(included in Current Assets):

Conveyance Loan 3,881,770 3,835,389

Computer Loan 1,057,715 1,059,492

4,939,485 4,894,881

20,486,008 21,661,837

5. DEPOSIT AND PREPAYMENT

2002 2001

RM RM

Deposit Of Electricity And Toll 7,500 7,560

Prepayment Of Postage – 83,814

Prepayment Of Maintenance Of Assets 156,011 312,451

163,511 403,825

6. PAYMENT OF ADVANCES

2002 2001

RM RM

Staff Advances 82,913 50,004

Salary Advances 18,084,632 7,956,824

Sundry Advances 438,200 1,060,081

18,605,745 9,066,909


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7. FIXED DEPOSITS AND SHORT TERM INVESTMENT

2002 2001

RM RM

Licensed Banks 36,500,000 23,227,575

Licensed Finance Institutions 5,000,000 28,000,000

Discount Houses 14,500,000 –

56,000,000 51,227,575

8. SUNDRY CREDITORS

2002 2001

RM RM

Employees Provident Fund 5,142,868 3,881,236

Social Security Organisation 197,400 162,504

Amount Due To Staff 11,986 51,143

Accrued Interest For Terms Loan 362,063 396,545

Deposits 70 70

Supply And Services 12,555,741 6,944,621

18,270,128 11,436,119

9. TERM LOANS

2002 2001

RM RM

Pensions Trust Fund Council 79,598,958 89,900,000

Total Payables Within 12 Months

(Included In Current Liabilities) (11,237,500) (10,301,042)

Balance As At 31 December 68,361,458 79,598,958

Inland Revenue Board had received a loan from Pensions Trust Fund Council amounting to RM89.9 million to finance

the purchased of four buildings which are Antap Plaza in Ipoh, Wisma Mercu Wawasan in Tawau, Wisma Hasil in Miri,

Bangunan Wisma Perkeso in Kota Bharu and also a piece of land at Lot 2, Jalan 14/2, Seksyen 4, Bandar Baru Bangi,

Selangor. Service charge for this loan is 7% on daily balance and paid within 8 years by instalment.


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10. DEVELOPMENT FUND

2002 2001

RM RM

Balance As At 1 January 98,833,129 99,108,289

Annual Fee From Federal Government 89,700,000 9,750,000

Expenditure Which Does Not Form Fixed Assets (20,656,358) (10,025,160)

Balance As At 31 December 167,876,771 98,833,129

11. TRUST FUND

2002 2001

RM RM

Akademi Percukaian Negara 568,114 450,870

General Tax Administration Course (International) 194,273 128,490

International Course For Bhutan 118,436 124,864

Balance As At 31 December 880,823 704,224

The Trust Fund Of Akademi Percukaian Negara has been set up to account for all receipts and payments related to the

welfare of courses participants, training activities, research and publications of the Akademi Percukaian Negara

Malaysia.

The Trust Fund For International Courses represents the balance of allocation for the International Courses managed by Akademi

Percukaian Negara Malaysia and ASEAN-Cooperation Unit.

12. OTHER FUND

2002 2001

RM RM

(a) Conveyance Loan Trust Fund 15,000,000 15,000,000

(b) Computer Loan Trust Fund 3,000,000 3,000,000

(c) Investment Trust Fund 18,000,000 18,000,000

36,000,000 36,000,000


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13. ACCUMULATED SURPLUS / (DEFICIT)

2002 2001

RM RM

Accumulated Surplus From Previous Year 36,307,179 47,519,155

Current Surplus / (Deficit) Of Income (6,453,629) (9,881,088)

Prior Year Adjustment – (1,330,888)

Accumulated Surplus Carried Forward 29,853,550 36,307,179

14. DEFERRED INCOME

Deferred Income is a government grant in term of fixed assets which were acquired in 1996. Those fixed assets have been

accounted in financial year 1998.

2002 2001

RM RM

Balance As At 1 January 1,916,048 3,832,097

Current Year Adjustment (1,916,048) (1,916,049)

Balance As At 31 December – 1,916,048

15. REVENUE

Revenues consist of the income from the following sources:

2002 2001

RM RM

Annual Fee 531,530,800 343,409,900

Service And Service Payments 232,519 267,840

Sales Of Others Printing Goods 86,406 19,274

Penalties 2,769 13,800

Other Income 7,222 280

531,859,716 343,711,094



16. STAFF COSTS

Staff costs consist of:

2002 2001

RM RM

Emolument 272,500,815 170,566,795

Fixed Allowance 9,772,781 6,215,185

Statutory Contribution 56,000,616 35,874,754

Overtime Allowance 2,868,963 1,923,571

Other Allowances 36,803,695 26,443,224

377,946,870 241,023,529

17. ANNUAL FEE AND OTHER INCOME RECEIVED

2002 2001

RM RM

Total Revenue (Note15) 531,859,716 343,711,094

Other Operating Income 56,247 4,895

Deposit And Prepayment 240,314 (312,451)

532,156,277 343,403,538

18. PAYMENT TO SUPPLIERS AND EMPLOYEES

2002 2001

RM RM

Staff Cost (Note 16) 377,946,870 241,023,529

Other Operating Expenditure 116,023,292 97,028,994

Sundry Creditors (6,834,009) 1,846,673

Provision for Audit Fee (64,000) 12,599

Prior Year Adjustment – 1,330,888

487,072,153 341,242,683

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19. CAPITAL COMMITMENT

2002 2001

RM RM

Approved and contracted 4,382,000 10,600,000

In the current year, the Board has been approved to buy a piece of land of 0.67 acres at PT 4, Section 27, Petaling Jaya in a direct

purchase with Persatuan Alumni Sekolah Alam Shah at cost of RM4.382 million. In the year 2001, the Board has been approved

to buy a piece of land of 4.9 acres at Lot 57, Section 45, Bandaraya Kuching, Sarawak in a direct purchase with PERNAS Properties

Sdn. Bhd. at cost of RM10.6 million.

20. INCOME TAX

The Board, under section 127(3)(b) of Income Tax Act 1967 is exempted from tax for the year of assessment 1997 and subsequent

years of assessment. This exemption does not include dividend income.

21. COMPARISON FIGURES

The comparison figures have been rearranged to suit the presentation of the account for the current year.

22. GENERAL INFORMATION

The Board at the end of the financial year has 6,780 staffs (2001: 6,528 staffs).

Statistics ................................................................ 157

Tax Rates And Duties ............................................. 159

Acts, Regulations, Rules AndPublic Rulings ........................................................ 164

Litigation ............................................................... 170

APPENDICES


Statistics

FEDERAL GOVERNMENT REVENUE,

DIRECT TAXES AND REVISED ESTIMATE

1997 1998 1999 2000 2001 2002

RM Million RM Million RM Million RM Million RM Million RM Million

Federal Government Revenue 65,736 56,710 58,677 61,864 79,567 83,515

Direct Taxes 30,476 29,978 27,047 29,167 41,794 44,324

Revised Estimate for Direct Taxes 29,600 30,016 26,910 29,808 34,256 46,125

PROCESSING OF INCOME TAX

RETURNS (ITR) (NUMBER)

1997 1998 1999 2000 2001 2002

ITR Issued 2,629,933 2,969,146 2,879,501 2,984,988 2,852,813 3,379,759

ITR Received 1,828,126 2,000,326 2,013,968 2,080,787 1,897,504 2,159,596

ITR Assessed 1,671,907 1,763,957 1,849,738 1,833,551 1,591,081 1,895,210

TAX COLLECTION BY CATEGORY

2000 2001 2002

RM Thousand RM Thousand RM Thousand

Companies 13,980,398 21,582,400 27,383,214

Individual 7,042,003 8,399,270 7,109,046

Petroleum 6,010,166 9,858,226 7,636,225

Stamp Duty 1,788,181 1,645,504 1,769,622

Real Property Gains Tax (RPGT) 248,873 228,579 344,088

Co-operatives 86,671 65,476 69,022

Labuan Offshore Business Activity Tax (IOFC) 7,968 12,615 11,713

Other Taxes 2,445 2,326 1,374

Total 29,166,705 41,794,396 44,324,304

TAX AUDIT

1997 1998 1999 2000 2001 2002

Number of cases audited 811 1,045 2,108 3,827 1,826 1,926

Number of cases finalised 694 706 1,148 1,337 1,604 1,850

Taxes and penalties (RM’000) 20,419 100,400 35,127 41,415 51,254 77,031

INVESTIGATION

1997 1998 1999 2000 2001 2002

Number of cases 609 549 688 672 748 656

Taxes and penalties (RM’000) 509,785 362,063 407,363 428,138 397,258 386,488

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Statistics

No. Classification No. of Calls Total

1. Callers Tax Agent 5,662

Companies representative 818 6,494

LHDN branches 14

2. Location Kuala Lumpur 5,616 6,494

Outside Kuala Lumpur 878

Instalment payment 2,499

3. Reasons Credit section 108 580 6,494

Tax Return 1,600

Others 1,815

4. Interviews 1,081

Topics Number Number of Participants

STS for individual employment 307

STS for individual business 131

Procedures and Regulations for Tax Audit 31 30,442

Others 7

Total 476

• GENERAL ISSUE FOR INCOME TAX RETURN (ITR) YEAR OF ASSESSMENT 2001

Type of Return Total ITR

Form B & M 3,031,135

From P, T & C1 125,269

Form C (STS) 253,333

Grand Total 3,409,737

2002 Letters (Numbers) Phone Calls (Numbers) Counters (Visitors)

Questions 688,859 405,171 2,124,182

Complaints 14,892 18,628 7,408

Notices / Interviews / Discussions 238,438 54,498 636,467

Total 942,189 478,297 2,768,057

• COMMUNICATION

• CALL CENTRE

• TALKS, BRIEFINGS AND SEMINARS

CUSTOMER SERVICE

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Tax Rates And Duties

•INDIVIDUAL INCOME TAX RATES (EFFECTIVE FROM YEAR OF ASSESSMENT 2002)

Chargeable Income RM Tax Rate Tax(%) (RM)

On the first 2,500 0 0On the next 2,500 1 25

On the first 5,000 25On the next 5,000 3 150


On the first 20,000 475On the next 15,000 7 1,050

On the first 35,000 1,525On the next 15,000 13 1,950





On the first 250,000 54,975Above 250,000 28

•WITHOLDING TAX RATE FOR NON-RESIDENTS

Type of Income Tax Rate

Royalties 10%

Service by public entertainer 15%

Interests 15%

Special classes of income – technical fee, installation fee and 10% rental of moveable property under section 4A ITA 1967

• Contract payments (service portions) to contractors 10%• Contract payments (service portions) for employees’ tax 3%

• Effective from year of assessment 2002, Income tax rate for non-resident individuals - 28% • Company income tax rate - 28% • Petroleum income tax rate - 38%

Effective from 21.9.2002}

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Chargeable Income RM Tax Rate Tax(%) (RM)

On the first 20,000 0 0On the next 10,000 3 300









On the first 500,000 106,800Above 500,000 28

•With effect from year of assessment 2003, the income tax rates for resident companies in Malaysia with paid-up ordinary sharecapitals of not more than RM2.5 million at the beginning of the basis period for a year of assessment are as follows:

•COOPERATIVE INCOME TAX RATES (EFFECTIVE FROM YEAR OF ASSESSMENT 2002)

For every ringgit on the first 100,000 20%

For every ringgit in excess of 100,000 28%

•With effect from year of assessment 2003, the income tax rates for resident companies in Malaysia with paid-up ordinary sharecapitals of more than RM2.5 million at the beginning of the basis period for a year of assessment - 28%

Chargeable Income RM Income Tax Rate

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•REAL PROPERTY GAINS TAX RATES : DISPOSER OTHER THAN COMPANIES

Disposal within two years after the date of acquisition of the asset 30%

Disposal in the third year after the date of acquisition of the asset 20%

Disposal in the fourth year after the date of acquisition of the asset 15%

Disposal in the fifth year after the date of acquisition of the asset 5%

Disposal in the sixth year after the date of acquisition of the asset or Nilthereafter

For disposals by companies, the tax rate on the disposal in the fifth year after the date of acquisition of the asset orthereafter - 5%.

Category of Disposal Tax Rate

•DISPOSER IS A NON-CITIZEN AND NON PERMANENT RESIDENT INDIVIDUAL

Disposal within five years after the date of acquisition of the asset 30%

Disposal in the sixth year after the date of acquisition of the asset or 5%thereafter

Category of Disposal Tax Rate

•STAMP DUTIES ON CHARGEABLE INSTRUMENTS

Affidavit, Statutory Declaration or Written Declaration on oath oraffirmation

Agreement or Memorandum of AgreementUnsigned agreements or memorandums of agreement

Articles of Association of a Company

Policy of Insurance

Power or Letter of Attorney

Promissory Note

• Executed in favour of a bank, merchant bank or a borrowing company.

• Others.

RM10

RM10

RM100

RM10

RM10

RM10

RM10

TYPE OF INSTRUMENT DUTY PAYABLE

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Charge or Mortgage (including those executed under the Syariah law), Bond,Covenant, Debenture (non-marketable security)

Being the principal or primary security (except under certain circumstances) in respectof:

a. Section 5A (Loan and financing for small businesses) applies:

• For an amount not exceeding RM250,000 of the aggregate loans

• For every additional RM1,000 or part thereof.

b. Foreign currency loans or financing under the Syariah law in currencies other than theringgit

c. In any other cases

RM1 for every RM1,000 orfractional thereof

RM5 for every RM1,000 or partthereof

RM5

RM5 for every RM1,000 (or partthereof) but the total duty payableshall not exceed RM500

TYPE OF INSTRUMENT DUTY PAYABLE

•CONTRACT NOTE

Relating to the sale of any shares, stocks, or marketable securities incompanies incorporated in Malaysia or elsewhere.

RM1 for every RM1,000 or a fractional part of RM1,000of the value of any shares, stocks or marketablesecurities.

INSTRUMENT DUTY PAYABLE

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•CONVEYANCE, ASSIGNMENT OR TRANSFER

Conveyance of property

Stocks, shares or marketable securities, to be computed on the price orvalue thereof on the date of transfer, whichever is higher.

For every RM100 or a fractional part of RM100 of theamount of the monetary value of the consideration orthe market value of the property, whichever is higher –

• RM1 on the first RM100,000• RM2 on any amount in excess of RM100,000 but not

exceeding RM500,000• RM3 on any amount in excess of

RM500,000

RM3 for every RM1,000 or a fractional part of RM1,000

INSTRUMENT DUTY PAYABLE

•LEASE OR AGREEMENT FOR LEASE OF IMMOVABLE PROPERTY AND FOR SERVICES, FACILITIES AND OTHER MATTERSRELATING TO THE LEASE

Average rent and otherconsideration computed for oneyear (without fine / premium)

• Not exceeding RM2,400

• For every RM250 or partthereof in excess of RM2,400

In consideration of a lump sumpayment or premium (withoutrent)

In consideration of a lump sumpayment, premium or otherconsiderations (reserving arent)

Nil

The same rate of duty as for conveyance of property.

• The same rate of duty as for conveyance of property; and• The same rate of duty as for average rent and other consideration.

INSTRUMENT

DUTY PAYABLE

Where the lease is for a period

Nil Nil

RM1.00 RM2.00 RM4.00

Not exceeding oneyear

Exceeding one year but notexceeding three years

Exceeding three years or forany indefinite period

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Acts, Regulations, Rules and Public Rulings

Finance Act 2003

Following the 2003 Budget presentation, provisions of several lawswere proposed for amendment.

1. Income Tax Act 1967 (Act 53)a. Resident Status - Section 7(1)(b)

The condition that individuals are required to be physicallypresent in Malaysia at year-end (31 December) and at thebeginning of the following year (1 January) is relaxed.Temporary absence is considered as:

i. Portions of periods of less than 182 days; and /or

ii. Periods of at least 182 consecutive days.

This condition of ‘temporary absence’ is part of the periodlinking both years. The individual concerned is required tobe in Malaysia before and after his / her temporaryabsence. The amendment is effective from year ofassessment 2002.

b. Income From The Occupancy Of Premises For Non-Business Purposes - Section 11

A person occupying the premises (occupancy of ownpremises or the right to occupy premises) for non-businesspurposes shall not be considered as having a chargeablesource of income. Provisions related to the ownership ofpremises for non-business purposes are also amended /abolished:

i. Section 128 – Exemption of one owner occupiedhouse.

ii. Section 131 – Computation of gross income fromsection 11 source.

iii. Section 37 – Computation of adjusted income fromsection 11 source.

The amendment is effective from year of assessment2003.

c. Service Fees Paid To Non-Residents - Sections 4A[(i)and (ii)] and 15A [(a) and (b)]

Service fees classified as income under Sections 4A (i) and(ii):

i. Payments for services rendered in connection with theuse of property or rights belonging to or theinstallation or operation of plants, machineries orapparatus purchased from non-residents; and

ii. Payments for technical advice, assistance orservices rendered in connection with technicalmanagement or administration of any scientific,industrial or commercial undertaking, venture,project or scheme;

paid to non-residents are considered earned fromMalaysia and imposed a withholding tax of 10% ifthe payment is for services rendered in Malaysia.Payments not related to services rendered inMalaysia are not considered as earned fromMalaysia. The amendment is effective from 21September 2002.

d. Income From Malaysian Banking Activities - Section60C

Under the Income Tax Act 1967, the gross income ofMalaysian banking businesses does not include incomederived from Labuan offshore business activities conductedby a licensed Malaysian offshore bank. Income attributableto an offshore banking business activity of a licensedMalaysian offshore bank will be subjected to Labuanoffshore business Activity Tax Act (LOBATA) 1990. Theamendment is effective from year of assessment 2003.

e. Income Of Operational Headquarters Companies -Sections 6(1)(g), 60E and Schedule 1 (Part 1,subparagraph 2(a))

Income from approved services by operationalheadquarters companies are exempted fromincome tax for ten years commencing from the yearof assessment in the basis period during which theapproval was given. In line with this, dividends paidfrom tax-exempted income are exempted at theshareholder level. The amendment is effective fromyear of assessment 2003.

f. Income Tax Liability Of Company Directors - Sections75(1) and 75A

Company directors shall be liable to settle companyincome taxes. A director is defined as:

i. The person holding a post of director or manager or inmanagement; and

ii. That person, either individually or together with his /her associates:

• Owns more than 50% of the company’s ordinaryshares; or

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• Controls (either directly or indirectly or throughhis/her associates) more than 50% of thecompany’s ordinary shares.

The amendment is effective from 27 December2002.

g. The Obligation Of Keeping Documents Under TheSelf-Assessment System (STS) - Sections 82(1) and82A

Taxpayers are required to keep all documents(income and expenditure statements, invoices,vouchers, receipts and other relevant documents)for 7 years, for the purpose of determining thechargeable income. During audit, these documentsare required to support claims made in the incometax returns submitted to the Director General. Theamendment is effective from year of assessment2003.

h. Withholding Tax On Contract Payments To Non-Residents - Sections 107A(1)(a) and (1)(b)

The withholding tax rate imposed on contractpayments to non-resident contractors, is reduced:

i. From 15% to 10% of the payment to non-residentcontractors; and

ii. From 5% to 3% of the payment to employees of non-resident contractors.

The amendment is effective from 21 September 2002.

i. Authority To Remit Penalty On Failure To Settle Taxes- Section 108 (16)

Authority is given to the Director General of InlandRevenue in exercising discretion to remit total orpartial penalties on unpaid or late settlement oftaxes imposed under subsections 108(7), (9) and(10). The amendment is effective from year ofassessment 2001.

j. Repayment Under The STS - Sections 111(1A) and(1B)

Under the STS, for companies who submit theirincome tax returns according to section 77(1A) andwhere the LHDN is required to issue a repayment tothe company:

i. The income tax returns are considered as notices ofrepayment; and

ii. The company is considered to have been informed of

the repayment on the day of income tax returnsubmission.

The amendment is effective from year of assessment 2003.

k. New Income Tax Rate For Companies - Section 108(1A) and Schedule 1 (paragraph 2A Part 1)

Companies with paid-up ordinary share capital notexceeding RM2.5 million at the beginning of the basisperiod of an assessment year is taxed at the followingrates:

Chargeable income Income Tax rate

For every ringgit of the first RM 100,000 20%

For every ringgit inexcess of RM 100,000 28%

In accordance with this amendment, the new subsection108 (1A) provides a 28% tax deduction rate on dividendspaid, credited or distributed by the company toshareholders even though:

i. The chargeable income of the company for the year ofassessment does not exceed RM100,000; and

ii. The tax rate applicable is 20%.


l. Authority Of The Finance Minister To Determine TheStatus Of Industrial Building - Schedule 3 paragraph80

The Finance Minister is empowered to determine:

i. Whether a building that is built or purchased and usedfor business purposes is an industrial building; and

ii. The capital allowance entitlement to replace theallowance under Schedule 3 paragraph 12, 16 or 42.

The amendment is effective from 21 September 2002.

m. Amendment Arising From Current Year Basis OfAssessment System (STTS) - Schedule 4 sub-paragraph 2(a) and Schedule 4A paragraph 3

Taxpayers may make claims in the income tax returns toobtain deductions on expenses of approved prospectingoperations and deductions on capital expenditure ofapproved agricultural projects, in accordance with theprovisions of STTS. Taxpayers need not submit separateapplications for those claims. The amendment is effectivefrom year of assessment 2000 based on the current yearbasis.


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n. Period Of Application For Approval – Schedule 4Csubparagraph 2(a)

The previous deadline of 31 December 2003 toapply for approval of deduction incentives for foodproduction projects is extended to 31 December2005. The amendment is effective from 27December 2002.

o. Compensation For Loss Of Employment - Schedule 6paragraph 15

Income tax exemption on compensation for loss ofemployment received is raised from RM4,000 to RM6,000for each completed year of service. The amendment iseffective from year of assessment 2003.

p. Interest Income - Schedule 6 paragraph 35

Interest earned from the investments in:

i. Government-guaranteed securities or bonds; or

ii. Debentures (other than convertible loan stocks)approved by the Securities Commission,

is tax-exempted.


q. Reinvestment Allowance (RA) - Schedule 7A

i. Incentive Claims – paragraph 2

Taxpayers who incur approved capital expensesand who wish to enjoy reinvestment allowanceincentives are required to make their claims intheir submitted income tax returns. Theincentive period of 15 consecutive assessmentyears will commence from the year ofassessment in which the first claim is made. Theamendment is effective from year of assessment2003.

ii. Poultry Farming By Closed House Rearing System– paragraphs 1B and 11

The 2003 Budget proposed that the RA incentive isextended to individuals and partnerships engaged inpoultry farming, who transform their rearing systemsfrom opened house to closed house systems endorsedby the Ministry of Agriculture.

This is on the condition that:

• The poultry farming business has been operatingfor a period of not less than 12 months;

• The individual must be a citizen residing inMalaysia; and

• Capital expenditure related to the project has beenincurred.

For those whose businesses have changed, therequirement of the 12 months period is relaxedprovided that:

• The closed house poultry farming activities aremaintained even though the business has changed(e.g. from sole proprietorship to partnership orcompany); and

• The owner of the first business entity mustcontinue to be the owner or proprietor of thesubsequent business entity.

Business is considered to have commenced on thecommencement date of the first business. Theamendment is effective from year of assessment2003.

2. Income Tax Act (Amended) 2002 (ActA1151)Transitory Provision From Formal to Self-AssessmentSystem.

a. Income Calculation For Period Remaining After 12Months - Section 30(3)

A proportion of the deduction for disabledindividual (section 46(1)(e)) and relief for husband(section 45A) are also allowable in determining thechargeable income for the remaining period inexcess of 12 months. The amendment is effectivefor year of assessment 2003 only.

b. Tax Rebate For Period Remaining After 12 Months -Section 31

Additional tax rebate (section 6A) is given inproportion to the chargeable income for theremaining period in excess of 12 months if the totalchargeable income within that period does notexceed RM35,000. The amendment is effective foryear of assessment 2003 only.

3. Stamp Act 1949 (Act 378)a. Penalty For Late Remittance Of Stamp Duty - Section

9 (1)(c)

The 2003 Budget proposed an amendment to thepenalty imposed on bankers, dealers or insurers forlate remittance of stamp duties on cheques,contract notes or insurance policies from users to

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• RM4.00 if the lease period exceeds three years.

The amendment is effective from 1 January 2003.

4. Labuan Offshore Business Activity Tax Act1990 (LOBATA)a. Tax Treatment On Labuan Offshore Limited

Partnerships And Malaysian Offshore Banks - Section2(1)

The 2003 Budget proposed that the definition of anoffshore company is amended to include licensedMalaysian offshore banks and offshore limited partnership.‘Malaysian licensed offshore bank’ has the meaningassigned to it by the Offshore Banking Act 1990 and‘offshore limited partnership’ has the meaning assigned toit by the Labuan Offshore Limited Partnerships Act 1997.The income from activities by these two entities is assessedand taxed under LOBATA. The amendment is effectivefrom year of assessment 2004.

b. Exemption By The Minister - Section 26

The Finance Minister is empowered to exempt anyoffshore company from any provision underLOBATA. The amendment is effective from year ofassessment 2004.

5. Income Tax Rules And RegulationsIncome Tax Rules

a. Capital Expenditure Incurred For Energy-ConservingPurposes Of Businesses – P.U. (A) 349

Companies incurring capital expenditure on plant andmachinery to be used exclusively for the conservation ofenergy of its business (approved by the Ministry of Energy,Communications and Multimedia) are allowed toaccelerate their Capital Allowance deduction claims to 1year (40% for initial allowance and 60% for annualallowance). The amendment is effective from year ofassessment 2003.

b. Expenses On Corporate K-Based Economic MasterPlan – not gazetted yet

Capital expenditure on the drafting of theCorporate K-Based Economic Master Plan is allowedas a deduction in the calculation of income tax. TheEconomic Master Plan must contain the followinginformation:

i. Necessary measures to ensure that the activities arebased on high-level knowledge; and


the LHDN. The rates of penalty are reduced fromRM500 or 10%, to RM200 or 10% of the payableamount, whichever is higher. The amendment iseffective from 1 January 2003.

b. Penalty On Late Stamping - Section 47AThe rates of penalty for late stamping or failure to do soare amended as follows:

The amendment is effective from 1 January 2003.

c. Duties On Immovable Property Leasing Agreements– First Schedule Items 22(5) and 49(a)

Stamp duties for instruments or agreements for the leaseof immovable property with service charge are imposedtwo separate duties as follows:

i. Lease agreements are subject to duty under item 49(a),and

ii. Terms of service are subject to duty under item 22(1)(a)at the stipulated rate of duty in the First Schedule item27(a)(ii).

The 2003 Budget proposed that agreements for the leaseof immovable property with service charge (e.g.maintenance and security services) is subject to one dutyonly, i.e. under item 49(a).

Where the average annual rental for a whole year:

i. Does not exceed RM2,400 – no duty imposed.

ii. For every RM250 or part thereof in excess ofRM2,400

• RM1.00 if the lease period does not exceed oneyear.

• RM2.00 if the lease period exceeds one year butdoes not exceed three years.

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RM25 or 50% of theunpaid duty,whichever is higher.

RM50 or 100% ofthe unpaid duty,whichever is higher.





Less than 3months

3 to 6months

Morethan 6months

PeriodRate of Penalty

Original After Amendment


ii. Company’s cost estimate on the implementation of theproposals / measures in the plan.

The rule is effective from year of assessment 2003.

c. Issuance Of Islamic Private Debt Securities – P.U. (A)107

Expenses incurred on the issuance of private debt securitiesbased on Islamic principles (mudharabah, musyarakah andijarah) will be allowed as a deduction in income taxcalculations for 5 years, from years of assessment 2003 to2007 (at 20% per annum). Expenses on security issuanceinclude expenses on registration, legal matters, preparationof prospectus, marketing, promotions and other relatedexpenses. The rule is effective from year of assessment2003.

d. Deductions To Promote Professional Services – P.U.(A) 124

The double deduction incentive given on expensesincurred to promote the export of professional services isextended to professional services rendered by individuals orpartnerships. The rule is effective from year of assessment2003.

e. Cost On Acquisition Of A Foreign Owned Company– P.U. (A) 310

The costs incurred by local owned companies acquiringforeign owned companies are given an annual allowancededuction of 20% for 5 years, on the acquisition cost ofthe foreign company. "Acquisition of a foreign ownedcompany" is defined as the acquisition of a foreign ownedcompany located outside Malaysia for the purpose ofacquiring high technology:

• for local production; or

• for acquiring new export markets for local products asapproved by the Malaysian Industrial DevelopmentAuthority.

The rule is effective from 21 September 2002.

f. Care Centres For Old Folks – P.U. (A) 143

Buildings used as an old folks care centre approvedby the Social Welfare Department, are given anindustrial building allowance. The entitlementamount is 10% of the capital expenditure incurredin relation to construction or purchase costs of thebuilding, for 10 years. The rule is effective from yearof assessment 2003.

g. Conversion To Planting Of Rubber Trees – notgazetted yet

Plantation companies that switch to planting rubber treesare given an incentive allowance of 100% on the capitalexpenditure incurred for the preparation of land, plantingand crop maintenance, provided that at least 10 % of theplantation area is planted with rubber trees. The ruleapplies to applications received by the Ministry of PrimaryIndustries from 21 September 2002.

h. Consolidation Of Management Of Smallholders AndIdle Land – not gazetted yet

Companies that invest in a subsidiary company involved inthe consolidation of management (approved by theMinistry of Primary Industries) of smallholders or idle landare granted tax deductions in the computation of adjustedincome equivalent to the amount of investment. The ruleis effective from year of assessment 2003.

Income Tax Order

a. Approved Food Production Projects – P.U. (A) 72

The incentive given for food production projects approvedunder Schedule 4C is extended to deep-sea fishing. Theincentive is the same as that given to companies involvedin the investment of food production projects. The order iseffective from 21 September 2002.

b. Regional Distribution Centres – not gazetted yet

Statutory income earned by regional distribution centres istax-exempted for 10 years. Dividends distributed from tax-exempted income are tax-exempted at the shareholderlevel. This incentive is subject to the conditions that theregional distribution centre is:

i. Approved by the Ministry of Finance;

ii. Located at a free zone, licensed warehouse or licensedmanufacturing warehouse; and

iii. Not allowed to sell more than 20 % of the distributedgoods to the local market.

The order applies to applications received by MIDA from21 September 2002.

c. Employment At Operational Headquarters (OHQ)Companies or Regional Offices (RO) - P.U.(A) 382

Non-citizen individuals are exempted from tax on incomeearned from an employment performed outside Malaysia,


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with operational headquarters companies or regionaloffices. The order is effective from year of assessment2003.

Stamp Duty Exemption / Remission Order

a. Stamp Duty On Islamic Banking FinancingInstruments Under The Syariah Law - P.U. (A) 432 and433

Instruments executed under the principles of the Syariahlaw for:

• Asset sale agreements and asset purchase agreementsfor the renewal of existing Islamic revolving financingfacilities (duly stamped) are exempted from stampduty.

• Asset sale agreements executed for the reschedulingor restructuring of any existing Islamic financing facility(duly stamped) are remitted up to the payable duty onthe balance of the principal amount.

The order is effective from 21 September 2002.

b. Stamp Duty On Real Property Transfer InstrumentsBetween Immediate Family Members - P.U. (A) 434

Stamp duty on immovable property transfer instrumentsnot involving any consideration, but based only on loveand affection, is remitted by 50 percent for the followingtransactions:

i. From husband to wife;

ii. From wife to husband;

iii. From parent(s) to child*; and

iv. From child to parent(s).

* For this purpose, child refers to legitimate child, stepchild,or adopted child in accordance with any law. The order iseffective from 1 January 2003.

6. Public RulingsTo provide explanation on the LHDN’s interpretation,implementation and application of the provisions of law, theLHDN issues public rulings from time to time. However, thesepublic rulings are only issued to provide guidance to taxpayersand tax practitioners to understand how a provision of law isgiven tax treatment and they are not binding on any taxpayer.In 2002, the LHDN issued two Public Rulings for the IncomeTax Act 1967 as follows:

a. Bad And Doubtful Debts And Recovery Treatments –Public Ruling 1/2002

This ruling applies in respect of the deductions for bad anddoubtful debts under section 34 and the treatment ofrecoveries under section 30 ACP 1967. The ruling iseffective from year of assessment 2002.

b. Pre-Operational and Pre-Commencement Expenses –Public Ruling 2/2002

This ruling explains the pre-operational and pre-commencement expenses that are allowed as deductionsin the calculation of the chargeable income of a company.


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Litigation

A. TAX APPEAL CASES HEARD BEFORE THE SPECIAL COMMISSIONER OF INCOME TAX (PKCP)

H.S.M.S.1.

L.E. Sdn. Bhd.2.

NO. NAME OF CASE STATUS / REMARKSISSUE

Z. Sdn. Bhd.3.

G.I. Sdn. Bhd.4.

A.R.A.H./M.E.H./M.R.A.R.

5.

T.L. Sdn. Bhd.6.

I.G.B.C. Sdn. Bhd.7.

K.T.N. Sdn. Bhd.8.

H.M.H.9.

R.S.C.10.

Whether legal expenses are deductible under section33 of the Income Tax Act (ITA), 1967.

Whether management fees paid to the holdingcompany are subject to subsection 4A(ii) thereforemaking section 109B ITA 1967 applicable.

Whether the cost of the canvas bag claimed bytaxpayer is allowed as a deduction under subsection33(1) ITA 1967 or whether this expense is notapplicable under the provision of paragraph 39(1)(l)of the same act.

Whether the disposal price of real property in thesales and purchase agreement can be replaced withthe market value in the event of a big differencebetween the reported price and the market valuedetermined by the Department of Property Valuationand Services.

Whether taxpayer acted as nominator for itsassignee when signing the sales and purchaseagreement for the purchase of real propertyfrom the developer.

Whether the formula for distribution of commonexpenses is based on gross income or only on interestincome.

• Whether the bank guarantee fee is deductibleunder section 32 ITA 1967.

• Whether interest expense is to be dividedamong exempted income or non-exemptedincome.

• Whether payment of premium from lease istaxable under ITA 1967 or Real Property Gains TaxAct (RPGTA) 1976.

• Whether penalty under section 113 ITA 1967 canbe imposed on taxpayer.

Whether disposal by taxpayer is subject to tax underRPGTA 1976.

Whether commission received from food stallsby club members and guests is regarded asbusiness income.

Taxpayer withdrew appeal.

Both parties reached agreement undersection 102(5)(a) ITA 1967.




Taxpayer’s appeal allowed. TheDirector General of Inland Revenue(DGIR) filed an appeal to the HighCourt.

Case not yet fixed for hearing.

Taxpayer’s appeal denied. Premium andpenalty can be imposed.

Fixed for oral submission on 23.01.2003.


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M.D.Y.11.


S.L.G.L.12.

M.S.D.13.

F.H. Sdn. Bhd.14.

M.U.I. Berhad15.

A.T. Sdn. Bhd. 16.

H.P. Sdn. Bhd. 17.

• Whether disposal of shares by taxpayer issubject to tax under paragraph 34A Schedule2 RPGTA 1976.

• Whether the acquisition price determined by thegovernment valuer is correct.

Whether taxpayer is a resident for year ofassessment 2000 according to section 7(1)(b) ITA1967.

• Whether disposal of shares by taxpayer issubject to tax under paragraph 34A Schedule2 RPGTA 1976.

• Whether the acquisition price determined by thegovernment valuer is correct.

• Whether the assessments for years of assessment1990 and 1991 are raised outside the prescribedtime limit under subsection 91(1) ITA 1967.

• Whether the assessment notice for the year ofassessment in question was submitted within areasonable period according to subsection 96(1) ITA1967.

Whether the market value determined by thegovernment valuer or a private valuer is used as thedefined value in the calculation of the governmentacquisition price.

Whether profit from the disposal of real propertyat the plot of land in Mukim Plentong, Johor isregarded as chargeable business income undersection 4(a) ITA 1967, or capital disposal subjectto tax under RPGTA 1976.

• Whether failure to report disposal of asset statedunder section 29(3) RPGTA 1976 only refers tofailure to make any report or includes failure tomake a report within the prescribed period.

• Whether the penalty under section 29(3) RPGTA1976 or the compound under section 40 RPGTA1976 is imposed on the taxpayer. Taxpayer did not failto report the disposal of asset, but merely delayed inmaking the report by 4 months.

• Whether taxpayer should only be subject to amaximum compound of RM5,000.00 undersection 40(1) RPGTA 1976.

Case is fixed for decision on 18.2.2003.

Taxpayer’s appeal denied. No furtherappeal made by taxpayer.

Case is fixed for mention on 27.2.2003.



PKCP decided that the disposal is subject toITA 1967. Taxpayer filed an appeal to theHigh Court.

Taxpayer’s appeal allowed. The DGIR filedan appeal to the High Court.

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Whether expenses such as interest on loans and landassessment paid prior to the commencement ofbusiness (source of rental income) are deductible undersection 33 ITA 1967.

Whether the disposal price of shares, debts or companyliabilities is deductible.

Whether disposal of real property is subject to section4(a) ITA 1967 or RPGTA 1976.

Determination of business commencement date forhousing developers.

• Whether the DGIR is empowered under paragraph11(2)(c) Schedule 2 RPGTA 1976 to reject thedisposal price agreed upon between the seller andthe buyer in the sales and purchase agreement,although the disposal was executed as a transactionat arm’s length.

• Whether the disposal price applied by the DGIR iscorrect.

Whether disposal of real property is subject to section4(a) ITA 1967 or RPGTA 1976.

• Whether the disposal price of land is regarded asthe sale price or the market value of the asset.

• Whether payment of commission notsupported by proof of payment is allowed asan expense.

Whether profit from logging concessions given by theState Government to taxpayer is regarded as revenue orcapital.

Whether the ratio certificate submitted by taxpayeris an acceptable certificate under the provision ofsection 54(4) ITA 1967.

Whether dividends and interests received were froma single source of income.

Whether dividends and interests received were froma single source of income.

18. W Sdn. Bhd.

19. T.T.K.

20. K.S.A.S Berhad

21. Y.R. Sdn. Bhd.

22. P .B. Sdn. Bhd. .

23. C.G.L.C. Sdn. Bhd.

24. S.A. Sdn. Bhd.

25. P.K.E.I.N.J.

26. G.A.C (G.C.S.)

27. H.L.I. Sdn. Bhd.

28. A.H. Sdn. Bhd.


Case fixed for decision on 18.2.2003.

Hearing has not reached conclusion. Bothparties are still making submissions.

Taxpayer’s appeal allowed. No furtherappeal made by the DGIR.

Case heard on 25-26.11.2002. Hearingfixed to continue on 27.2.2003 and from25.03.2002 to 27.03.2003.

Taxpayer’s appeal allowed.

Case is fixed for mention on 24.2.2003.

Case is in hearing.


Case is adjourned, pending decision on thecase of Multi Purpose Sdn. Bhd.

Taxpayer’s appeal allowed. Further appealfiled to the High Court by the DGIR.

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Whether the disposal price applied by the DGIR iscorrect.

Whether dividends and interests received werefrom a single source of income.

Whether expenses incurred on loose toolsamounting to RM622,000.00 in the first year ofbusiness are allowed as a deduction underparagraph 33(1)(c) ITA 1967.

Whether profit from logging concessions isregarded as revenue or capital.

• Whether expense in the form of free tickets /trips abroad incurred by taxpayer is an allowedexpense under section 33(1) ITA 1967.

• Whether the said expense is not allowed undersection 39(1)(l) ITA 1967.

29. B.A.N.A.

30. A.M.D. Sdn. Bhd.

31. Y. M. Sdn. Bhd.

32. U.Z.M.

33. A.M.C. Sdn. Bhd.


Case is adjourned, pending decision on thecase of Multi Purpose Sdn. Bhd.



Taxpayer’s appeal denied. Taxpayer filed anappeal to the High Court.

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B. TAX APPEAL CASES HEARD BEFORE THE HIGH COURT

Whether taxpayer is eligible for investment taxcredit under section 26(1) of the InvestmentIncentive Act, 1968 for year of assessment 1985 onpre-commencement capital expenditure incurredby taxpayer.

• Whether the withholding tax remitted to theDGIR is deductible.

• Whether all service charges imposed on theappealer by affiliates are included undersection 4A of the Petroleum (Income Tax) Act1967.

• Whether the cost of restructuring theheadquarters is deductible under section 15(1)of the Petroleum (Income Tax) Act 1967.

• Whether the DGIR is prevented from raisingassessment under section 39 of the sameAct.

Whether donations under subsection 44(6) ITA 1967are to be divided between chargeable income andnon-chargeable income.

Whether profit from the sale of real property is subjectto income tax or real property gains tax.

Whether the method of distribution of commonexpenses made by the DGIR is correct according to law.

Whether an amount of RM3.7 million received by taxpayer is regarded as commission for services rendered.

Whether bank guarantee fees are deductible undersection 33 ITA 1967.

NAME OF CASE STATUS / REMARKSISSUE

P.K.E.N.J.

S.P.C.S. Sdn Bhd

E.P. M. Inc

The High Court decided that taxpayer is noteligible for tax credit. No further appealmade by taxpayer.

Case is in hearing.

Taxpayer’s appeal allowed. The Courtdecided that the DGIR is not empoweredunder ITA 1967 to make this division. TheDGIR filed an appeal to the Court ofAppeal.

Both parties reached agreement underparagraph 102(5)(a) ITA 1967.

Case is adjourned, pending decision on thecase of Daya Leasing Sdn. Bhd.

Hearing fixed to continue on 27.3.2003

Taxpayer’s appeal allowed. The DGIR filedan appeal to the Court of Appeal.

M.H. Sdn. Bhd.

F. Sdn. Bhd.7.

3.

1.

2.

4.

NO.

S. L. Sdn. Bhd.5.

O.K.B.6.

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C. TAX APPEAL CASES HEARD BEFORE THE COURT OF APPEAL

P.S. Sdn. Bhd. Whether profit from the sale of shares is regarded asbusiness income or realised investment.

Whether taxpayer is eligible for exemption undersection 15(a) of the Stamp Act 1949.

Whether short and long-term savings (FD) areregarded as business income under section 4(a)ITA 1967.

Whether tax claims are given preference whencompany is under receivership.

Whether expenses incurred by taxpayer are regarded asentertainment expenses and subject to section 39(1)(l)ITA 1967.

Whether profit from compensation received for thetakeover of a portion of land by the government isregarded as profit arising from business activities.

Whether revenue received from the rental of a factorybuilding is regarded as income from a business undersection 4(a) or rental income under paragraph 4(d) ITA1967.

Taxpayer’s appeal denied.

Awaiting decision of the Court of Appeal.

The DGIR’s appeal denied.

Awaiting decision of the Court of Appeal.

Hearing to continue on a date to be fixed.

Case has not been fixed for hearing.



G.P.A. Sdn. Bhd.2.

1.

P.C.E.O. Sdn. Bhd.3.

L.L.H. Sdn. Bhd.4.

C. Sdn. Bhd.5.

P.R. Sdn. Bhd.6.

G.D.P.D.F. Sdn. Bhd.7.

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Direktori / Directorypada / as at 1.1.2004

PEJABAT KETUA EKSEKUTIF CHIEF EXECUTIVE’S OFFICE

Tingkat 15, Blok 9Kompleks Bangunan KerajaanPeti Surat 1183350758 Kuala Lumpur. Tel : 03-62091000 Faks : 03-62013798

AKADEMI PERCUKAIAN NEGARANATIONAL TAX ACADEMY

Persiaran Wawasan 43650 Bandar Baru Bangi Selangor. Tel : 03-89255611, 89257080 Faks : 03-89257299

JABATAN CUKAI ANTARABANGSAINTERNATIONAL TAX DEPARTMENT


JABATAN HARTAPROPERTY DEPARTMENT


JABATAN KEWANGANFINANCE DEPARTMENT


JABATAN NAZIRANINSPECTORATE DEPARTMENT

Tingkat 11, Blok 9Kompleks Bangunan KerajaanPeti Surat 1183350758 Kuala Lumpur Tel : 03-62091000 Faks : 03-62031859

JABATAN UNDANG-UNDANGLEGAL DEPARTMENT


BAHAGIAN KHIDMAT KORPORATCORPORATE SERVICES DIVISION

Tingkat 10, Blok 9Kompleks Bangunan Kerajaan Peti Surat 1183350758 Kuala Lumpur. Tel : 03-62091000Faks : 03-62016752

BAHAGIAN PENYELIDIKAN & PEMBANGUNANRESEARCH & DEVELOPMENT DIVISION


UNIT PERHUBUNGAN AWAMPUBLIC RELATIONS UNIT

Tingkat 10, Blok 9Kompleks Bangunan Kerajaan Peti Surat 1183350758 Kuala Lumpur. Tel : 03-62031380 Faks : 03-62012434

UNIT TRANSFORMASITRANSFORMATION UNIT

Tingkat 15, Blok 9 Kompleks Bangunan Kerajaan Peti Surat 1183350758 Kuala Lumpur.Tel : 03-62091000 Faks : 03-62012245

JABATAN PEMATUHANCOMPLIANCE DEPARTMENT


JABATAN PENGURUSAN HASILREVENUE MANAGEMENT DEPARTMENT

Tingkat 13, Blok 9 Kompleks Bangunan Kerajaan,Peti Surat 1183350758 Kuala Lumpur. Tel : 03-62091000 Faks : 03-62018891

JABATAN PENTADBIRANADMINISTRATION DEPARTMENT


JABATAN TEKNIKALTECHNICAL DEPARTMENT


JABATAN TEKNOLOGI MAKLUMATINFORMATION TECHNOLOGY DEPARTMENT

Tingkat 12 & 13, Blok 11Kompleks Bangunan Kerajaan Peti Surat 1183350758 Kuala Lumpur. Tel : 03-62091000 Faks : 03-62010705

JABATAN SIASATANINVESTIGATION DEPARTMENT

Tingkat 14, Blok 11Kompleks Bangunan Kerajaan Peti Surat 1183350758 Kuala Lumpur. Tel : 03-62091000 Faks : 03-62013170

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CAWANGAN / PUSAT PENYIASATAN & PERISIKAN / BRANCHES / INVESTIGATION & INTELLIGENCE CENTRES

JOHOR

Pejabat Pengarah Negeri JohorTingkat 6, Bangunan Menara Jati No. 1, Jalan Padi Emas 1Bandar Baru Uda81200 Johor Bahru, Johor.Tel : 07 - 2323603Faks : 07 - 2325605

Cawangan Johor BahruTingkat 1 - 8, Bangunan Menara JatiNo.1, Jalan Padi Emas 1, Bandar Baru Uda81200 Tampoi, Johor Bahru, Johor.Tel : 07-2359510 (10 talian) Faks : 07-2359524

Pusat Penyiasatan & Perisikan Johor BahruTingkat 7, Bangunan Menara Jati No.1, Jalan Padi Emas 1, Bandar Baru Uda81200 Tampoi, Johor Bahru, Johor.Tel : 07-2387792, 2381462, 2351973Faks : 07-2359557

Cawangan KluangTingkat 2 - 7, Wisma BungaNo.11, Jalan LambakKarung Berkunci 52386009 Kluang, Johor. Tel : 07-7724644, 7724645, 7723098Faks : 07-7723133

Pusat Penyiasatan & Perisikan KluangTingkat 2, Bangunan KerajaanPeti Surat 104, Jln. Pejabat Kerajaan86007 Kluang, Johor. Tel : 07-7724484, 7724482Faks : 07-7714404

Cawangan MuarWisma Tiam Lock19-4, Jalan Sungai Abong84000 Muar, Johor.Tel : 06-9527000, 9523880Faks : 06-9536814

KEDAH

Cawangan Alor SetarWisma Yasmin, No. 1072-AJalan Teluk Wan Jah05200 Alor Setar, Kedah.Tel : 04-7319002, 7319684Faks : 04-7329841

Pusat Penyiasatan & PerisikanSerembanWisma Hasil, Lot 461 - 465Jalan Tuanku Munawir70600 Seremban, Negeri Sembilan.Tel : 06-7638850 Faks : 06-7646842

PAHANG

Cawangan KuantanTingkat 4 - 7Bangunan Kuantan Centre PointJalan Haji Abdul Rahman25000 Kuantan, Pahang.Tel : 09-5163000, 5112185, 5112187Faks : 09-5142067

Pusat Penyiasatan & PerisikanKuantanTingkat 7,Bangunan Kuantan Centre PointJalan Haji Abdul Rahman25000 Kuantan, Pahang.Tel : 09-5133669, 5132782 Faks : 09-5145516

Cawangan RaubNo. 5-9Taman Permai, Jalan Tras27600 Raub, Pahang.Tel : 09-3558502, 3558509 Faks : 09-3558501

Cawangan TemerlohNo. 16-30, Jalan Pak Sako 3Bandar Seri Semantan,28000 Temerloh, Pahang.Tel : 09-2962000, 2963712 Faks : 09-2965766

PERAK

Pejabat Pengarah Negeri PerakTingkat 7, Wisma Hasil No. 128, Jalan TambunPeti Surat 25030906 Ipoh, Perak.Tel : 05 - 5475522 samb. 100 (Talian

Am)05 - 5475669 (Talian Terus)

Faks : 05 - 5465471

Pusat Penyiasatan & Perisikan Alor SetarTingkat 7 dan 8, Wisma Persekutuan Jalan Kampung Baru, Peti Surat 8805710 Alor Setar, Kedah.Tel : 04-7322400, 7322060 Faks : 04-7340642

Cawangan Sungai PetaniKompleks S.P. PlazaTingkat 4 -10, Jalan Ibrahim 08000 Sungai Petani, Kedah.Tel : 04-4235677Faks : 04-4231905

KELANTAN

Cawangan Kota BharuWisma Hasil Jalan Sultanah Zainab 15600 Kota Bharu, Kelantan.Tel : 09-7482103, 7487109Faks : 09-7487131

Pusat Penyiasatan & Perisikan Kota BharuWisma HasilJalan Sultanah Zainab 15600 Kota Bharu, Kelantan.Tel : 09-7487201, 7487205 Faks : 09-7477303

MELAKA

Cawangan MelakaTingkat 5-9 Graha Maju,Jalan Graha Maju 75990 Melaka. Tel : 06-2821099, 2821925Faks : 06-2841181

Pusat Penyiasatan & Perisikan MelakaTingkat 8 Graha MajuJalan Graha Maju, Peti Surat 4575990 Melaka. Tel : 06-2821099Faks : 06-2812026

NEGERI SEMBILAN

Cawangan SerembanWisma Hasil, Lot 461-465 Jalan Tuanku Munawir 70600 Seremban, Negeri Sembilan.Tel : 06-7638850 Faks : 06-7625339

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L E M B A G A H A S I L D A L A M N E G E R I M A L A Y S I A ■ 178Direktori / Directory

pada / as at 1.1.2004

Cawangan IpohWisma HasilNo.128, Jalan TambunPeti Surat 250, 30906 Ipoh, PerakTel : 05-5475522 (20 talian) Faks : 05-5475668

Pusat Penyiasatan & Perisikan IpohTingkat 3, Wisma HasilNo.128, Jalan Tambun Peti Surat 250, 30906 Ipoh, PerakTel : 05-5475522 (15 talian) Faks : 05-5475730

Cawangan TaipingLot 360 & 2051, Wisma Hasil Jalan Kota, Peti Surat 9134008 Taiping, Perak.Tel : 05-8072685, 8072666, 8072828Faks : 05-8086118

Pusat Penyiasatan & Perisikan Taiping Lot 360 & 2051, Tingkat 4Wisma HasilJalan Kota, Peti Surat 9134008 Taiping, Perak.Tel : 05-8072666, 8072685 Faks : 05-8064304

Cawangan Teluk IntanBlock B & CKompleks Perniagaaan SKOMKLot 956 & 957, Jalan MahkamahPeti Surat No. 8236008 Teluk Intan, Perak. Tel : 05-6221322, 6221323, 6221324,Faks : 05-6213482

PERLIS

Cawangan KangarTingkat 3, Bangunan KWSPJalan Bukit LagiPeti Surat 47, 01700 Kangar, Perlis.Tel : 04-9764811, 9764812, 9764816 Faks : 04-9765798

PULAU PINANG

Cawangan Pulau Pinang Tingkat 3-11 Bangunan Dewan Perniagaan Melayu Lebuh Pantai, Peti Surat 660 10910 Pulau Pinang. Tel : 04-2612255, 2612544, 2612422,

2612366, 2612744 Faks : 04-2628406

Cawangan LabuanUnit E.004 & E.005Tingkat 1, Podium LevelKompleks Ujana Kewangan Jalan Merdeka, Peti Surat 8046487014 Wilayah Persekutuan Labuan. Tel : 087-415331, 415331Faks : 087-415385

Cawangan KeningauBlok H, Lot 68 - 72 Kompleks Perdagangan AdikaJalan Masak, 89008 Keningau, Sabah.Tel : 087-339441, 339442, 339452 Faks : 087-339451

SARAWAK

Pejabat Pengarah Negeri SarawakAras 17, Wisma Ting Pek KhiingNo.1, Jalan Padungan 93100 Kuching, SarawakTel : 082 - 243211 samb. 282 (Talian

Am) 082 - 421511 (Talian Terus)

Faks : 082 - 244475

Cawangan Kuching Aras 2-4, 6-8, 10-12A dan 15 Wisma Ting Pek KhiingNo.1, Jalan Padungan 93100 Kuching, Sarawak.Tel : 082-243211 Faks : 082-244475

Pusat Penyiasatan & Perisikan KuchingTingkat 6Bangunan Wisma Bukit Mata Kuching Jalan Tuanku Abd. Rahman93100 Kuching, Sarawak. Tel : 082-253267, 259099Faks : 082-233475

Cawangan BintuluLot 3730-3733, Medan JayaBatu 3 1/2Jalan Bintulu/Miri97000 Bintulu, Sarawak. Tel : 086-316601, 316604, 316602Faks : 086-316608

Cawangan Miri Wisma Hasil, Lot 2996Jalan Adenium, Taman MDL 98000 Miri, Sarawak. Tel : 085-434000Faks : 085-413824


Pusat Penyiasatan & Perisikan Pulau PinangTingkat 11-12, Wisma MTT26, Pengkalan Weld10300 Pulau Pinang.Tel : 04-2633244Faks : 04-2620701

Cawangan Bukit MertajamWisma HasilNo. 20, Lorong Perda Selatan 2Bandar Perda14000 Bukit Mertajam, Pulau Pinang.Tel : 04-6212020Faks : 04-6211445

SABAH

Pejabat Pengarah Negeri SabahTingkat 3, Blok E Bangunan KWSP Jalan Karamunsing88600 Kota Kinabalu, Sabah.Talian Am : 088 - 238511 samb. 208Talian Terus : 088 - 314223Faks: 088 - 250223

Cawangan Kota Kinabalu Tingkat 1, Blok EBangunan KWSPJalan Karamunsing88600 Kota Kinabalu, Sabah.Tel : 088-238511, 238609Faks : 088-245062

Pusat Penyiasatan & Perisikan Kota Kinabalu Tingkat 7, Blok BBangunan KWSPJalan Karamunsing88600 Kota Kinabalu, Sabah. Tel : 088-237005, 237006Faks : 088-268712

Cawangan TawauWisma Hasil66, Jalan ln Mesra Off Km. 2, Jalan KuharaBeg Berkunci No. 44 91009 Tawau, Sabah. Tel : 089-777177, 777141, 777142,

772713 Faks : 089-776390

Cawangan Sandakan Tingkat 3, Wisma PersekutuanKm 11, Jalan LabukPeti Surat 135090714 Sandakan, Sabah. Tel : 089-668554, 668555, 668375 Faks : 089-669616

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Cawangan SibuTingkat 2 & 3, Blok 1 Wisma PersekutuanJalan Awang Ramli Amit96000 Sibu, Sarawak.Tel : 084-320640 Faks : 084-319934

SELANGOR

Cawangan Shah Alam Tingkat 9-13, Plaza PerangsangPersiaran Perbandaran40000 Shah Alam, Selangor.Tel : 03-55103202, 55103276,

55103324Faks : 03-55102328

Pusat Penyiasatan & Perisikan Shah AlamTingkat 2, Plaza PerangsangPersiaran Perbandaran 40000 Shah Alam, Selangor.Tel : 03-55103202Faks : 03-55121477

Cawangan KlangMenara AcmarTingkat Bawah & Satu (Sayap B)Tingkat 2-7, Jalan Gelugor41400 Klang, Selangor.Tel : 03-33449770 Faks : 03-33449541

Cawangan Petaling Jaya Aras 1, 2, 7 & 8Wisma Kelana Brem (Tower 1)Jalan SS 7/15 (Jalan Stadium) 47301 Kelana Jaya, Selangor.Tel : 03-78827500 Faks : 03-78039767, 78043627

TERENGGANU

Cawangan Kuala TerengganuTingkat 1 - 8, Wisma PERMINTJalan Sultan Ismail, Peti Surat 6520916 Kuala Terengganu, Terenganu.Tel : 09-6203220, 6203221, 6203225 Faks : 09-6227829

Cawangan Jalan Duta(Penaksiran Wilayah Persekutuan)Tingkat 1, 3-8, Blok 8AKompleks Bangunan KerajaanJalan Duta, 50600 Kuala Lumpur. Tel : 03-62091000Faks : 03-62013823, 62016166,

62018061

Cawangan Tidak BermastautinTingkat 10 & 11, Blok 11Kompleks Bangunan Kerajaan Jalan Duta, 50600 Kuala Lumpur.Tel : 03-62091000, 62091481Faks : 03-62019745

Cawangan Cheras Tingkat 8 - 12, Menara PGRMNo. 8, Jalan Pudu Ulu, Cheras56100 Kuala Lumpur.Tel : 03-92848022 Faks : 03-92875466, 92849022

Cawangan PungutanTingkat 15, Blok 8A Kompleks Bangunan KerajaanJalan Duta, Beg Berkunci 1106150990 Kuala Lumpur.Tel : 03-62091000Faks : 03-62015495, 62012024,

62015499

Pusat Penyiasatan & Perisikan Kuala Lumpur Tingkat 14-15, Blok 11 Kompleks Bangunan Kerajaan Peti Surat 1183350758 Kuala Lumpur.Tel : 03-62092300, 62092500Faks : 03-62011924

Pusat Penyiasatan & Perisikan KualaTerengganuTingkat 6, Wisma PERMINTJalan Sultan IsmailPeti Surat 6520916 Kuala Terengganu, Terengganu. Tel : 09-6203666Faks : 09-6241770

WILAYAH PERSEKUTUAN

Pejabat Pengarah Wilayah PersekutuanTingkat 15 Kiri, Blok 8A Kompleks Bangunan KerajaanJalan Duta,50600 Kuala Lumpur.Tel : 03 62091000 samb. 3276 (Talian

Am)03-62019079 (Talian Terus)

Faks : 03 - 62012024

Cawangan SyarikatTingkat 3-10, Blok 11Kompleks Bangunan KerajaanJalan Duta,Karung Berkunci 11035 50990 Kuala Lumpur.Tel : 03- 62018622, 62010135

62015504, 62013134, 62013914Faks : 03-62014409, 62018622

Cawangan Wangsa Maju Tingkat Bawah, M & 6 - 10 Menara KausarJalan 3/27 A, Seksyen 1Bandar Baru Wangsa Maju 53300 Kuala Lumpur. Tel : 03-41426022 Faks : 03-41427022

Cawangan Kampung Attap Tingkat UG, 8, 9, 11 20 & 21Wisma KWSGJalan Kampung Attap 50460 Kuala Lumpur.Tel : 03-22633600Faks : 03-22723226, 22736675



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