PETALING JAYA: The Inland Revenue Board (LHDN) will now not have to inform taxpayers when requesting their bank account details from banks for assessment or investigation, in accordance to proposed amendments to Section 106A of the Income Tax Act.
Tax professional Koong Lin Loong advised Sin Chew Daily that beforehand, taxpayers had to signal a consent kind earlier than banks might furnish bank account data to authorities.
However, with the inclusion of the proposed part, authorities will probably be ready to request this from banks straight and banks won’t be allowed to disclose these requests to any individual.
Section 106A is likely one of the proposed amendments within the Finance 2021 Bill, which has been tabled for first studying in Dewan Rakyat.
Koong mentioned the Personal Data Protection Act (PDPA) wouldn’t be relevant when imposing Section 106A sooner or later.
According to the PDPA, banks are to purchase taxpayers’ consent earlier than furnishing bank account details to LHDN.
The proposed Section 106A additionally states that if LHDN expenses a taxpayer in court docket, LHDN is allowed to request for taxpayers’ bank account details as soon as a detention order is issued.
“The authorities can even request for taxpayers’ data from associations to examine if revenue tax was filed from the angle of donations,’’ he mentioned.
It is estimated that tax evasion quantities to a whopping RM300bil annually, or 18% of the nation’s gross home product.
Koong mentioned Malaysia had signed agreements with 150 nations on automated change of knowledge. Malaysia can also be taking part within the Organisation for Economic Co-operation and Development (OECD) to adjust to worldwide necessities on tax planning.
Datuk Chua Tia Guan, Asia Business Center Malaysia tax and monetary consulting head, mentioned when the LHDN fails to gather tax arrears from a taxpayer, it’s entitled to seize the taxpayer’s property, together with bank financial savings, as soon as it’s granted a court docket order.
He advised Sin Chew Daily that the new requirement permits LHDN direct access to taxpayers’ bank accounts and prohibits the banks from informing the taxpayers.
“The Section states that banks are liable to a high quality of between RM200 and RM20,000, or a most of six months’ jail, or each, for violation,’’ he mentioned.
According to the Income Tax (Exchange of Information) Rules 2021, which was gazetted on Dec 1, banks don’t want to inform taxpayers when the authorities request their bank account data.
According to the Convention on Mutual Administrative Assistance in Tax Matters, international governments are allowed to request for his or her taxpayers’ data in Malaysia.
Chua mentioned likewise, the Malaysian authorities might additionally search Malaysians’ wealth data from different nations.
Since 2016, Malaysia has exchanged data with greater than 100 nations robotically, and may obtain data on Malaysian residents’ wealth standing abroad. – Sin Chew Daily
