KUALA LUMPUR: The Inland Revenue Board (IRB) has enlisted third party sources or informants that would furnish reports on the possession of extraordinary wealth by individuals and revenues generated through off-shore banking transactions.
Its chief executive officer, Datuk Seri Sabin Samitah, said such collaboration was carried out with other taxation authorities through the Automatic Exchange of Information agreement signed in September.
He said a notice would be issued to those who failed to declare such possessions based on cross-checks carried out on the revenue listed in the board’s database.
“The notice, issued through an accompanying letter and form, under Section 79 of the Income Tax Act 1967, would require the recipients to furnish necessary details within 30 days, of which a legal action would follow suit should they fail to comply.
“Section 120 of the same Act provides a maximum fine of RM2,000 or six-month imprisonment against any individual who refused to comply with the notice issued by IRB,” he said when contacted today.
Sabin said apart from the foreign taxation authorities, IRB sources include insurance companies and the Road Transport Department.
“Revenues garnered from commissions, whether from being an agent or middleman in any business deals would be discovered through the same method.
“Bank Negara Malaysia (BNM) would also inform IRB on any account transactions over RM50,000,” he said.
On gifts, Sabin said the existing laws did not prohibit anyone from accepting them, except for civil staff who were subjected to the government ethics.
He said IRB had no authority over the matter, but the government staff were required to report it to their chiefs.
“There is no restriction for others (non-government staff) or businessmen from accepting gifts. In short, as long as there is no declaration notice issued by IRB, that person is not required to provide an explanation,” he said.
Finance Minister Lim Guan Eng in tabling the 2019 Budget on Friday said IRB would investigate any extraordinary wealth displayed by individuals, which included those who owned luxury items such as jewellery, watches, handbags, luxury cars or real estate.
He had said the board would take necessary actions to recover the tax revenue, whether through penalties, fines or supplementary tax.