BACKGROUND

Internal Tax Division is responsible to collect Sales Tax, Sales Tax on Petroleum, Service Tax, Excise Duty and Windfall Profit Levy through these laws:-

- Service Tax Act 1975

- Excise Act 1976

- Sales Tax Order (Petroleum)(Payment) 1999

- Windfall Profit Levy 1999

This division contributes Department’s revenue collection of more than 60% and the percentage involves increases annually. Tax and levy are collected from manufacturers and people or companies who have given their services under given acts. The rates of the tax collected are:-

•     Sales Tax is 5%, 10% and 20%.
•     Service Tax 5%
•     Excise Duty is at ad valorem rate of 10% to 100% and at a specific rate of between 10 sen to    RM28 per liter for alcoholic beverages and RM81 per kg for tobacco.
•     Sales Tax Petroleum at a specific rate of between 0.5862 sen

               per liter for petroleum and 0.1964 per liter for diesel.

This division is responsible to provide to the industry facilities or amenities to encourage industry growth towards reaching 2020 of becoming an Industrial Country. The amenities given include obtaining raw material and non tax packaging material and specific tax exemptions under Ministry authority. This division is also involved in diesel subsidy and LPG policy stipulation through Diesel Subsidy Approval Committee Meeting.

Internal Tax Division had collected RM12.49 with 41 773 licensee in the year 2003.

Internal Tax Division Administration structure, Head Office lead by Internal Tax Director is divided by branches Sales Tax, Service Tax and Excise, Petroleum and Levy, while state Internal Tax Division administration structure is divided by function; those are Licensee Authorization, Collection and Facility Control.


MISSION
Internal Tax Division mission is to collect country’s Indirect Tax and help to encourage internal industry growth with commitments to:-

- To execute laws which are rightly and penetrably administered;
- To increase the public and licensee’s knowledge regarding the importance of laws and to upgrade the adherence;
- To ease the system and procedure to make it equalize to the current needs;
- To provide professional and quality service.

GOAL
Internal Tax administration is to become the most important, acknowledged and respected indirect tax collector.


OBJECTIVE
1.    To collect precise, fast and effective Sales Tax, Service Tax, Excise Duty and Levy in accordance with the policy development and national indirect taxation strategy;
2.    To assist in  implementation of a fast and efficient to industrial development policy and national commerce activity by simplifying trading and industrial affairs as well as the region and international cooperation;
3.    To upgrade monitoring and control, collection and facility to prevent from country’s revenue leakage.

STRATEGY
1.    To upgrade industry and Department’s member adherence and integritytowards the related laws and regulation.
2.    To upgrade ‘delivery system’ by forming a practical, simple, penetrable, and effective implementation system for all activities under Internal Tax management.
3.    To prepare a professional, integrity and committed Internal Tax member.
4.    Resource and energy’s optimum and effective usage.
5.    The usage of the latest information technology in internal tax management in the country and station.
6.    To implement smart partnership approach in all aspect of management amongst the internal tax client.
7.    To decide internal tax relevant function and role to policy changes and national taxation strategy.