Anyone who evades paying Goods and Services Tax (GST) or assists another person to do so will be slapped with a fine of between 10 and 20 times the amount of tax involved.
Those guilty of the offence may also be jailed a maximum of five years or face both the fine and imprisonment.
If the offence is repeated, the fine will double, whereby offenders shall pay between 20 and 40 times the amount of tax, be jailed up to seven years, or both.
This is among the offences under the GST Bill 2014, which was tabled by Deputy Finance Minister Datuk Ahmad Maslan for first reading in the Dewan Rakyat yesterday.
If the amount of tax evaded cannot be ascertained, offenders will be liable to a fine of between RM50,000 and RM500,000, seven years' jail or both.
In the Budget 2014 announcement last year, Prime Minister Datuk Seri Najib Tun Razak said GST would be imposed at the rate of 6% on selected goods and services.
GST, to be implemented on April 1 next year, will replace the current consumption tax, which consists of a sales tax of 10% and 5% service tax.
It is also an offence for any person to overclaim tax refund or entitlement to relief.
The offence is punishable with a fine not exceeding RM50,000 (S$19,000) , three years' jail or both. On top of that, there will be a penalty of two times the amount refunded or entitled as relief.
The Bill states that the Customs director-general has the power to request the Immigration Department to prevent a person from leaving Malaysia unless and until he pays his outstanding tax, penalty, surcharge or other fees.
The Customs director-general may allow any tax or penalty to be paid by instalments under prescribed circumstances to be determined by him.
Any imported goods shall not be released from Customs control until the tax is paid in full, except if it is allowed by the director-general.
Those who have overpaid tax, penalty or other fees may make a claim to the Customs director-general within six years for a refund.
Among the items exempted from the tax are rice, flour, vegetables, sugar, fish, chicken, salt, cooking oil, eggs, chicken, cencaluk, budu and belacan.
Services, such as public transport and education, will also be exempted.