Abstract
Determinants of Indicators for Risk Management Process of Royal Malaysian Customs Department
Highlights
Taxation has become the current economic agenda in providing a stable flow of revenue to finance public expenditure for vital services such as national security, maintaining law and order, healthcare, education and training and to strengthen its physical infrastructure (Vladu & Matis 2010)
Revenue Board of Malaysia (IRBM) that handles the collection of direct taxes while, the Royal Malaysian Customs Department (RMCD) is responsible for the collection of the indirect taxes
The huge gap in the amount of tax collected by RMCD as compared to IRBM has led RMCD to strengthen its administration by avoiding leakages in revenue collection while simultaneously, curbing illegitimate borders’ activities and tightening controls in deterring frauds
Summary
Taxation has become the current economic agenda in providing a stable flow of revenue to finance public expenditure for vital services such as national security, maintaining law and order, healthcare, education and training and to strengthen its physical infrastructure (Vladu & Matis 2010). Tax revenue in Malaysia comes from two sources, the direct and indirect taxes. Revenue Board of Malaysia (IRBM) that handles the collection of direct taxes while, the Royal Malaysian Customs Department (RMCD) is responsible for the collection of the indirect taxes. In 2013, about RM120.5 billion of direct taxes and RM35.4 billion of indirect taxes were collected by IRBM and RMCD respectively (Miskam et al 2013). The huge gap in the amount of tax collected by RMCD as compared to IRBM has led RMCD to strengthen its administration by avoiding leakages in revenue collection while simultaneously, curbing illegitimate borders’ activities and tightening controls in deterring frauds. The issue of tax evasion has become the central issue in the revenue collection in Malaysia both for direct and indirect tax. The higher penalty was imposed on the tax evaders, the increasing tax gap detected during the auditing process seemed alarming
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