According to the Sales Tax Bill 2018, a repeat offender who tries to evade tax or assist others to do so can face up to four years longer in prison compared to the previous Sales Tax 1972.
Under Section 43A of the now-defunct Sales Tax 1972, punishment against tax was capped at a fine of not more than RM50,000 or an imprisonment of up to three years or both against tax evaders.
However, under Section 86(2) the Sales Tax Bill 2018, a first-time offender will face a fine of between 10 to 20 times the sales tax amount or up to five years imprisonment or both.
A second or subsequent offence will see a fine of between 20 to 40 times the sales tax amount or up to seven years imprisonment or both.
However, Section 86(3) provides for a fixed fine of between RM50,000 and RM500,000 if the exact amount of sales tax evaded could not be determined.
The Sales Tax Bill 2018 also provides for tougher punishment for those abetting in the preparation of a return statement that understates the liability for sales tax.
Under Section 86(4), those found guilty can face a fine of between RM2,000 and RM20,000 or up to three years imprisonment or both.
In contrast, Section 44 of the previous Sales Tax 1972 provides a fine of up to RM5,000 or up to a year in prison or both for a similar offence.
The same punishments outlined in the Sales Tax Bill 2018 is similarly used in the Services Tax Bill 2018.
Both bills were today tabled in Parliament for first reading as part of the legislative move to replace the goods and services tax (GST).
If passed, the new legislations allow the ministry to set when the new tax system will commence through a publication in the Gazette.
Putrajaya has indicated that it intends to introduce a 10 percent sales tax and six percent services tax beginning in September.
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