KUALA LUMPUR: The Auditor General Report 2015 has listed eight major aspects on the Inland Revenue Board Malaysia’s (IRBM) travel ban implementation that needs to give due attention.
Firstly, no notice of legal action was issued to taxpayers subjected to travel restrictions. Next, it was the delay in the issuance of notice of legal action.
The report also stated as of the date the audit was being conducted, the enforcement of travel has yet to be approved in the Self-Assessment System for Non-Company and the status of tax defaulters, who have already been barred from leaving the country, were not updated in the Immigration Status on Travelling Overseas System.
A civil suit has yet to be taken against tax defaulters even though they have been barred from leaving the country. There are currently 1,600 cases with restrictions amounting to RM95.25 million.
Also, temporary relief has already been approved even before the agreed payment has been received from taxpayers.
There are also cases of non-compliance with the conditions set by IRBM for taxpayers who have been given temporary releases with 11 cases of individuals with restrictions amounting to RM1.42million
Finally, 14 individuals and one foreigner with travel restrictions amounting to RM990,804 have managed to receive a second temporary release despite the fact that they failed to comply with the conditions set by IRBM upon their first temporary release.
The report stated in detail that the failure to provide notice of legal action to taxpayers subjected to travel restrictions account for 704 individual cases with restrictions amounting to RM24.96 million, 49 cases for company directors with restrictions amounting to RM17.30 million and 194 cases for foreigner with restrictions amounting to RM12.97million.
As for the delay in issuance on notice of legal action involving 288 cases of individuals with restrictions amounting to RM11.38 million (delayed between 3 days to 26 years); 3 cases of company directors with restrictions amounting to RM62,804 (delayed between 13 days and 8 months) and 75 cases of foreigners with restrictions amounting to RM6.76 million (delayed between 6 days to 9 years).
The Self-Assessment System for Non-Company showed a total of 180 cases were involved with restrictions amounting to RM11.02 million, while the Immigration Status on Travelling Overseas System had 147 cases with restrictions amounting to RM13.69million.
In order to further enhance the management’s efficiency on handling travel restrictions, the report have recommended that IRBM updates the process of blacklisting tax defaulters from travelling abroad and improves its system in order to enable efficient checking and monitoring on all taxpayers who have been barred from leaving the country.
The report said as of June this year, a total of 128,165 certificates of restrictions on travel abroad by Director General of Inland Revenue with tax arrears involved amounting to RM3.4 billion are still in force.
Under Section 104 of the Income Tax Act 1967 and Section 22 of the Real Property Gains Tax Act 1976, individuals or company directors would be barred from leaving the country if they failed to settle their taxes.