Self- Assessment System

•A method whereby a taxpayer is responsible for calculating his own tax and making payment within the specified period.

•Taxpayers are given the onus to self- assessing and self-paying their income tax.

•Based on the “SELF ASSESS, PAY AND FILE’ concept (IRB Annual Report, 1998,p.100)

•Self Assessment is a total process change from the previous formal assessment system. Under the formal assessment system, taxpayers are required to declare their incomes in the Return Form, submit the Return Form to the Inland Revenue Board (IRB) and the IRB will then raise the assessment.

•The Notice of Assessment is sent to the taxpayer and based on the tax raised in the Notice of Assessment, payment must be made accordingly.

•Consider as the first step towards modernizing the national tax administration system.

•Embrace to the new system known as ‘Electronic Tax Filing System (e-filing)’ as to integrate with the electronic government concept.

•Introduce for corporate taxpayers on 2004 and for individuals on 2006.

•Under the Self Assessment System, taxpayers are still required to complete and submit Return Form by the required dates. Taxpayers will have to calculate their own tax and make payment of the full amount.

•In the case of an employee, the Schedular Tax Deduction Scheme will continue to apply i.e. tax will be deducted from the monthly salary and remitted to the IRB by the employer.

•The purpose of Self Assessment is to modernize and upgrade the tax administrative system in the country. It creates an efficient tax system, speeds up the collection of tax and improves the rate of tax compliance.