"ketetapan umum dipatuhi" : The 2006 LHDN* rant #2:

You know how when you’re signing in for an internet banking session you’re prompted with a caveat like “I have read and understood and agree to comply with the Terms and Conditions of Use”? ........ Or when installing certain software, you also get prompted with something similar? ....... And those Terms & Conditions seem to be 3 pages long, small print and full of legalese which you can’t possibly absorb in one sitting anyway? ........ But you are expected to say “yes” otherwise you can’t use the services? ......So you say “Yes” but hope that all goes well cos you know those T&C are biased in the favor of the bank should anything go wrong…

The “ketetapan umum dipatuhi” question on the new Income Tax form seems to be of the same spirit.

As far as I knew, the translation was something like “general requirements have been adhered to” … and everyone I asked last year had no idea what this was about, and I think all of us just went ahead and indicated YES on the form… after all, when in doubt, best to say yes, eh? What do do,,,,, we HAVE to submit the form; the explanation for this question is totally lacking in the Buku Panduan (Guide Book); and leaving the space blank will probably cause problems with processing, knowing how things (don’t) work around here…

This time around, I wanted to try to see what it is that I’m saying YES to.

Again, the Buku Panduan was no help. Neither was the LHDN website – can’t believe they don’t have a search function on their page!!??

But thanx to Google, found an Income Tax Help discussion thread within the United Subang Jaya Forum that had two pertinent posts. See the first two on the top of this page: one recommends saying NO, the other YES! Arrggh!! Which??? But taking a step back, I realized the most important thing in there was actually finding out the proper translation of “ketetapan umum dipatuhi”: “compliance to public rulings”.

Which rang a vague muffled bell: pretty sure I *had* seen something about “rulings” on the LHDN page.

So back I went.

And yahoo!!! Found them!! (If you’re looking, go to the drop-down menu of Laws & Regulations and you’ll find them).

Hmmppph! Turns out that there are all these guidelines that have been issued "for the purpose of providing guidance for the public and officers of the Inland Revenue Board". These rulings set out "the interpretation of the Director General of Inland Revenue [DGIR] in respect of the particular tax law, and the policy and procedure that are to be applied".

They have fantastic titles like Perquisites from Employers, and Computation of Total Income for Individual.

On one hand, having this Y/N question in the form could be a (subtle) (forced) program of awareness & education by LHDN of the masses? You know, force people to educate themselves about these guidelines and clarifications.

Then again, seeing how blur everyone is about what these ketetapan umums *are* let alone patuhing them, it seems to be more along the lines of them putting words in our mouths, forcing us to make a statement we don’t understand; making it easy for them to come after us if there are (willful?) mistakes in our tax submissions…

From a PWC article Public rulings - must you comply? Public Rulings has no force of law. Yet, ordinary tax-payers should be concerned.

a. Is a "yes" tantamount to a declaration that the taxpayer has full knowledge of all the public rulings and gives an undertaking that all these public rulings have been complied with? If not, then what does "yes" mean? To what extent is the taxpayer legally bound to make sure that a "yes" means "yes!" and not "I think so, yes"?

b. On the other hand, what is the consequence of a "no"? Would the taxpayer be subjected to a tax audit if he admits to not complying with a particular ruling? And if non-compliance has resulted in lower tax payable, would an additional assessment based on the IRB's interpretation as stipulated in that ruling be raised? Plus a penalty for purported understatement of chargeable income that had arisen as a result of adopting a contrarian position?

c. What happens if the box is left blank by the taxpayer who, in all honesty, does not know whether he has complied with all the rulings? Though the law does not prescribe any penalty, can the IRB reject the tax return form as incomplete and treat any subsequent re-submission as late submission upon which a penalty would be imposed? This seems hardly fair to the taxpayers, the majority of whom are in the "don't know" category, to be forced to make a declaration which is not true, one way or other.

It would therefore seem that the burden of responsibility imposed upon the taxpayer to either answer "yes" or "no" is not one which can or should be taken lightly, and it would only be fair for them to be apprised of the answers to these questions before they make the declaration.

Exactly! I really want to know the consequences of either reply!

But looks like nothing is really known yet, eh?

I suppose I'll just go ahead and say YES again this year.

After all, I won't be the only one saying YES without really knowing what I'm declaring let alone its implications!!

F*ck it, am mailing in my submission tomorrow.