Responding to queries from FMT, an LHDN spokesman said: “We would like to assure (you) that the organisation will not encourage or nurture such a norm.”

FMT had raised the matter after medical practitioners suggested that they were being targeted, with LHDN’s audit officers allegedly rewarded a small percentage from the recovered sums.

A doctor claimed the medical fraternity had been told an internal arrangement was in place to reward LHDN officers for their efforts, leading to “overzealous” investigations.

“We were wondering why an officer from a government agency should be entitled to such payments,” said the doctor, who requested anonymity.

The LHDN spokesman said “the only percentages” that arise during an investigation relate to the calculation of penalties imposed on undeclared income.

Generally, a penalty of 15% of an unpaid amount is imposed for a first offence, 30% for the second, and 45% for the third.

“Even then, the director-general of inland revenue may exercise his discretion in accordance with the Income Tax Act 1967 to reduce or eliminate penalties imposed,” the spokesman said.

LHDN said an exception may be made in cases where a taxpayer makes a voluntary disclosure, but this ceases to apply once an audit begins.

The spokesman said a taxpayer may be selected for audit at any time, but clarified that the commencement of an audit does not necessarily mean an offence has been committed.

“These audits are conducted using a systematic risk-based approach and based on information from various sources.

“The main objective is to promote voluntary tax compliance with the ultimate objective of having a just and equitable tax administration in place so that taxpayers will only have to pay their fair share,” he said.

LHDN said auditing is a routine activity under the self-assessment system to ensure taxes are administered fairly.

“Do not be afraid. Know your rights and responsibilities in respect of a tax audit and investigation,” its spokesman said.