IRB says it can collect outstanding taxes even after death
Published 28 Jul 2017, 8:06 pm | Updated 29 Jul 2017, 1:04 am
The Inland Revenue Board (IRB) says it is legally empowered to collect outstanding taxes even after someone has died.
"IRB is empowered in accordance with Section 74 and Section 106 of the Income Tax Act 1967 to claim a deceased's outstanding tax from the rightful next-of-kin.
"If the next-of-kin is not able to pay the whole sum, IRB advises the next-of-kin to visit IRB's office to discuss paying in instalments," it said in a statement today.
Section 74 of the Income Tax Act 1967 states: "Where an individual dies in the basis year for a year of assessment, his executors shall be assessable and chargeable to tax for that year of assessment, for the following year of assessment and, whenever necessary, for any previous year of assessment in respect of the chargeable income of that individual for any such year of assessment; and, where they are so assessable and chargeable, they shall be assessable and chargeable to tax in like manner and to the like amount as the individual would be assessed and charged to tax if he had not died".
Section 106 of the same Act allows the government to recover tax due and payable through civil proceedings as a debt due to the government.
IRB made the explanation in response to a Facebook post by one Amran Mohamed complaining about the IRB pursuing his outstanding taxes from his wife after claiming that he had died.
In Amran's case, the IRB said it had mistakenly thought that Amran had passed away and apologised for the error.
"IRB found that the payee is still alive and would like to apologise to him for the mistake. "A letter of apology will be sent to him and appropriate action will be taken to avoid a similar mistake," it said.
However, IRB said that its power to collect outstanding taxes even from those who had died still stands.
Likewise, it said if a deceased had overpaid his or her taxes, the rightful next-of-kin can apply for a reimbursement with the relevant documents.
Section 74 of Income Tax Act 1967
Under Section 74, the executors of a deceased individual shall not distribute any of the assets of his estate unless they have made provision (in so far as they are able to do so out of those assets) for the payment in full of any tax which they know or might reasonably expect to be payable by them under this section.
Any executors who fail to comply shall be jointly and severally liable to pay a penalty equal to the amount of the tax to which the failure relates.
Section 106 of Income Tax act 1967
Recovery by suit
Under Section 106, any tax due and payable may be recovered by the Government by civil proceedings as a debt due to the Government.
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