HASiL can access bank accounts only through court order

The LHDN headquarters in Cyberjaya. — Bernama photo

KUCHING (Dec 19): The Inland Revenue Board of Malaysia (HASiL) has clarified that the new provision of Section 106A in the Income Tax Act (ITA) 1967 empowers it to access bank accounts only following a garnishee order by the court.

It explained in a statement yesterday that a garnishee proceeding is a process of enforcing a money judgment by the seizure or attachment of debts due to any party, in this case HASiL, following tax arrears by a taxpayer.

“The introduction of this new provision will help HASiL administer the country’s direct tax system more effectively by minimising tax leakages due to taxpayers’ failure to settle existing tax debts, besides increasing voluntary tax compliance among taxpayers,” said HASiL.

The statement was issued in light of media reports on to the board’s empowerment to access taxpayers’ bank accounts without first obtaining the permission of the bank account holder.

The Dewan Rakyat on Wednesday (Dec 15) passed the Finance Bill 2021, which included the introduction of Section 106A in the ITA 1967.

This section grants the power to the director-general of HASiL to call for bank account information for the purpose of making a garnishee order application.

According to HASiL, the powers conferred under the new provision do not give the agency absolute power to access taxpayer bank accounts arbitrarily.

It said that the agency has to go through a prescribed judicial process, and is limited to cases that have already gone through civil proceedings first.

“For taxpayers who are ready to carry out their tax responsibilities in an orderly manner, the introduction of S106A of the ITA 1967 should not cause any anxiety or concern as this provision does not apply to them.

“Therefore, the public need not worry about the new amendments to the ITA 1967,” added HASiL.

The agency reiterated that the new provision only empowers HASiL to obtain taxpayer’s bank account information after the garnish action was allowed by the court.

“HASiL once again emphasises that existing taxpayer’s bank accounts information that do not involve a garnishee order cannot be accessed by HASiL through this new provision,” it assured.

Further information on the new provision can be obtained from HASiL through care line on 03-89111000 / 603-89111100 (for overseas); HASiL Live Chat; and feedback form via https://ift.tt/2UHTbXB.

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