The Dewan Rakyat had on Wednesday (15 December 2021) passed the Finance Bill 2021, which includes the introduction of Section 106A in the Act.
This new section will now allow the Director General of the Malaysia Inland Revenue Board (“MIRB”) the power to access/request taxpayers bank accounts information from financial institutions, which at the same time prohibits the financial institutions from alerting/informing the taxpayer. Financial institutions who does not comply with the aforementioned directive may be liable to a fine between RM200 and RM20,000 or a maximum jail term of six months or both.
We wish to highlight, based on the wordings of Section 106A, the MIRB can only exercise the above power for the purpose of making an application to the court for a garnishee order (i.e. the recovery of taxes due and payable by a taxpayer to the government). The MIRB is not permitted to obtain the taxpayers bank account information for any other purposes.
The MIRB has further reaffirmed the above position via its media release dated 18 December 2021. A copy of the MRIB’s media release can be accessed via the above link.
In view of the above updates, taxpayers who have been complying with their income tax obligations should have no cause for worry. Nonetheless, taxpayers may choose to undertake a tax risk assessment to reassess their tax position.
