The Inland Revenue Board (IRB) will now pay you a compensation of 2% per annum on the amount refunded late, with effect from the year of assessment 2013!
Budget 2012 proposed that the compensation will be given to tax payers if the refund made after 90 days (for e-Filing) or 120 days (for manual tax filing) from the filing due date.However, the compensation is only applicable to those who filed their tax returns on time.
Currently, tax payers who are late in paying the outstanding tax or are late in submitting their returns are penalised 10% if they do not meet the due date.
Further penalty of 5% will be imposed if the outstanding tax is not paid within 60 days after the due date.
At the moment, IRB are not compensating any amount to tax payers if IRB is late in refunding tax overpaid.
Tax payers are delighted with the news and the compensation.
It is important to know that the Government is making a move to instill a sense of accountability with the IRB.
Small note from NBC Group:
It was commonly understood by our clients that IRB will take their own sweet time to refund the overpaid tax in the past. Several complaint letters (or more correctly request letters) needed to be addressed to IRB to expedite the process of refund.
IRB has progressively improved the process of refund these few years, even though some of our clients have yet to receive their refund after one year of submission of their tax returns.
NBC Group welcome this announcement from the Government, not merely on the compensation to be received by tax payers, but more on the accountability & effeciency boost by the Government and IRB.