Tax Audit and Tax Investigation in Malaysia Essay

Tax Audit and Tax Investigation in Malaysia Essay.

Tax Investigation must be clearly separate from Tax Audit. Tax Investigation is an inspection of the tax payers business or individual books, records or document in order to ensure the tax payer had reported the correct amount of income and tax that need to pay in accordance with tax laws and provisions. Tax investigation will be carried on by surprise which also known as back duty case. It was conducted on behalf of owner and outsiders like investors. When there is suspected based on detailed and clear evidence that show that the taxpayer has the intention to avoid paying the tax which also known as tax evasion.

The tax investigator will arrive at the tax payers premises and take the custody of the required documents, books and records for investigation purposes. Besides that, additional notice may be served if required.

It also will request the taxpayers, creditors and the bankers of the taxpayer to obtain some additional information in the purpose to invent the best judgment of the tax affairs of the taxpayer.

If there is necessary, tax investigator will require an interview with the taxpayer for further information. The tax investigation can be classified in two categories which is civil tax investigation and criminal tax investigation. Civil tax investigation involves the activity of detection of tax evasion. This will lead to the tax payers have the responsibility to recover the tax loss and coupled with heavy penalties. Criminal tax investigations focus on gathering some acceptable evidence that prosecute and belief that the tax evader is offences to the law. The purpose of Tax investigation is varies from business to business. It ensures the correct amounts of tax are collected and determine the person responsible for the offence and follow the criminal prosecution.

Tax audit is an inspection of a taxpayers business records and financial affairs to ensure that the amount of tax that reported and paid are according with tax laws and regulations. Unlike tax investigation, tax audit are not conducted surprisingly, it is conducted on behalf of the owners only and the appointment will made by them. The taxpayers are advice of the date and estimate of the duration of the audit. The scope of audit will also be defined in order to let the taxpayer prepare the document which required. Tax audit can be classified into 2 categories which are desk audit and field audit. Desk audit is conventional way of tax audit which involves in reviewing of the information or document on income and expenses as well as several types of claims made by a taxpayer in his income tax return. The taxpayer will obtained the information through correspondences or interview if it is require at the IRBs offices. Field audit is the most common way of tax audit under self assessment system. Field audit take places in the taxpayers premises for a detailed review of all relevant documents.

The selection of taxpayers for a field audit is based on some criteria such as business performance of the company, inconsistency of reporting income, spending habits or past compliance records and etc. Once the taxpayer is selected for field audit, the taxpayer is usually given between 2 to 4 weeks notice to prepare some documents ready for audit. Otherwise, the taxpayer can extend the notice through written request. The purpose of tax audit is to determine a true and fair view of the business records. The audit officer is responsible to ensure that the reported amount is correct and the amount of tax that paid is correct accordance with tax laws and regulations. The other purpose of tax audit is to achieve the voluntary compliance with the tax laws and regulations and to ensure that a higher tax compliance rate is achieved under the Self Assessment System. IRBM has taken the action to educate and create awareness of taxpayers about their rights and responsibilities under the provision of International Tax Audit.

Other than the differences above, there are some other differences among tax investigation and tax audit. Tax investigation is relates to critical checking of particular records while tax audit is relates to checking all books, documents and records. Investigation work will be completed in the way through cent percent checking which means it must be fully checking until it meets the result of approximately 100% and avoid any unnecessary error. On the other hand, audit work may complete the work by test checking such as some audit procedures is required in objectivity, inspection, computation of the document or records. There was no time limit for tax investigation, sometimes they may relate to many years but tax audit of the account is made particular time period such as once a year or few months once.

Another difference between tax investigation and tax audit is that the investigator normally may or may not be charted accountant because they just need to check on the specific records or documents while auditor usually was charted accountant so that they were only has the ability to check all the documents or records. Investigator work is difference with audit work because investigator normally is voluntary but it also will be compulsory in certain case while auditor work is usually compulsory under the law for companies and other concern. Due to investigation work, it needs to investigate the tax evasion from the tax payer through examine their documents or records, so that it may need to examine the employee personally to find out the causes and solve the problem.

Auditor is indifference with investigator, they does not examine the employee personally because it just needs to audit the documents or accounts continuously for a period of time. Thus, tax investigation will usually conduct after the audit accounts and the tax audit is usually conducted before the investigation of accounts. There is no legal requirement for tax investigator to require them to disclose the information while investigation but the law stated that the auditor may need full disclosure of the information for the board of director or shareholder of the company.


Choong K. F. (2008). Malaysian Taxation: Principle and practice (14th ed.). Malaysia: InfoWorld.

Mike Moffatt (2009). Income taxes- government spending on infrastructure. The effect of income tax on economic growth. Retrieved 27 February, 2009, from Pettinger (n.d.). Advantages of tax cuts. Retrieved 26 February, 2009, from policy (2009). Fiscal and tax policy. Retrieved 27 February, 2009, from purpose of tax cut (2004). Retrieved 27 February, 2009, from policy Objective (2009). News and Media. Retrieved 27 February, 2009, from Gupta (2002) Role of business taxation in socio-economic development of the country. Public Finance and tax planning. Retrieved 29 February, 2009, from

Tax Audit and Tax Investigation in Malaysia Essay

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Compare and Contrast the Populists and Progressives Essay

Compare and Contrast the Populists and Progressives Essay.

As the United States advanced into the twentieth century, the Populists and Progressives saw numerous economic, political, and social problems in need of reform. The Populist movement was a result of a campaign by the Farmer’s Alliance. Their chief organizer was a man named Ignatius Donnelly whose proposals were passed into law in the Progressive era. The Omaha Platform was adopted by the newly formed party and it called for the free coinage of silver. From an economic standpoint, the Populists hoped that this inflationary measure would eradicate the financial burden that plagued the nation’s farmers.

It also demanded reformation of the banking system, the graduated income tax, the secret ballot, the direct election of senators, and the eight-hour workday.

Similarly, the Progressive movement called for solutions to many economic ills in need of reform. The goal of most progressives was government regulation of business. Just as the populists had proposed years earlier, the progressives supported a graduated income tax, and a system to control currency.

In order to establish a system to control currency, the populists demanded the free and unlimited coinage of silver and gold at a ratio of sixteen to one, and that the circulating medium should be increased to at least fifty dollars per capita. At the height of progressivism, President Woodrow Wilson signed the Underwood Tariff into law.

The Underwood Tariff, which reduced taxes on imported goods, also included an income tax. As a result of the passing of the sixteenth amendment, the progressives used the federal income tax amendment to justify a graduated income tax. The income tax was first supported by Robert La Follette, the governor of Wisconsin, and it raised state taxes on corporations. In bank reformation, a major exception in proposed solutions occurred since the populists demanded that the government establish a postal savings bank whereas the progressives still supported the reformation of private banks. In final analysis, Wilson supported efforts to destroy monopolies, reformed banks, and enforced the Sherman Antitrust Act.

The Progressive movement also sought out ways to curb corruption and other political problems. The populists and progressives shared the knowledge that voting should be done by secret ballot, and both supported the direct election of senators. The progressives believed that corrupt politics could destroy the democracy of the United States, and, therefore, it was their duty to democratize elections. The progressives tried to put an end to the influence of political machines. Every political machine in the country had offered services, primarily to the working class, in return for votes. The populists had instituted the idea of referendum, which called for people to play more of a factor in the political process. Some western states adopted the initiative referendum, and the recall to help the people get more say in politics.

The initiative allowed citizens to get a petition signed and force the legislature to vote on the bill. The referendum allowed proposals to be placed on the ballot so they could be voted on come election time. The recall allowed a petition by voters to remove an official from office. The populists had pushed the government to enact the direct election of senators. The enactment, though idealized by the populists, was passed into law during the Progressive era with the passage of the seventeenth amendment. The significance of this amendment is that it rid states of appointed senators, and gave the political choice back to the urban workers.

In the same way, the progressives and the populists saw much need for social and labor reform. With workers facing long hours, dangerous conditions, and poor pay, the populists and progressives sought out to resolve the problems created by industrialization. The populists established the eight-hour workday in an effort to curb long hours. The progressives sought to cut worker’s hours also, but they also strove to end child labor, cut worker’s hours, and introduce a minimum wage. In the case of Muller v. Oregon, the court upheld an Oregon state law that limited women factory workers to a ten-hour workday, and other states soon began to regulate the hours worked by women.

Workmen’s compensation first materialized in the Progressive era. After New York’s Triangle Fire of 1911, numerous women died when they where forced to jump from a burning factory. As a result of the tragedy, many people urged the government to pass higher safety standards in factories, and the event inevitably led to zoning laws and building codes.

In order to bridge the gap between social classes, John Dewey introduced progressive education, which taught working class children about Victorian morals, democracy, and capitalism. Another social reform of much merit was the establishment of settlement houses. These settlement houses offered services to the urban poor, and the immigrants that composed this social class. Unlike the progressives, the populists viewed immigrants as the equivalent to aliens, and they treated them as such. All in all, Jane Addams, the cofounder of the Hull House and a vanguard for progressivism, provided adult education classes and recreational sports for children and adults.

Ultimately, class played a primary role in the failure of the populists and the success of the progressives. The populists failed for a wide variety of reasons. First, they did not get the support of the island communities. Secondly is the fact that free coinage of silver leads to inflation, which hurts urban workers. Yet another reason is that the crop lien system was being damaged by the Subtreasury Plan. Finally, they lost the support of the urban upper class because of the nationalization of railways, and Postal Saving Banks. On the other hand, the progressives enjoyed many successes during their tenure as a major political party. In conclusion, the progressives succeeded because they won the support of the middle class, island communities, and working class people.

Compare and Contrast the Populists and Progressives Essay

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