Travel ban is for 'stubborn' tax defaulters

Travel ban is for 'stubborn' tax defaulters
A picture of KL International Airport 2. Malaysians with unpaid taxes have been blacklisted in immigration records and barred from entering their home country.

KUALA LUMPUR - The Inland Revenue Board will not immediately penalise small-time tax defaulters, reassured Deputy Finance Minister Datuk Chua Tee Yong.

Responding to The Star's news report yesterday on how the board would act to bar tax defaulters from leaving the country, Chua said the move was neither aggressive nor intended to create panic.

"There are over 97,000 defaulters that the IRB is chasing, and it's important to recover the outstanding amount," he said, adding that the ban on international travel did not come out of the blue.

For the travel ban to be effected, the IRB has to send notifications to the defaulter in question, the police and the Immigration Department.

"This is only for people who completely ignore the IRB's attempts to approach them, and who don't even come up with a payment scheme to settle the arrears," said Chua, who reiterated that the IRB was not "trigger happy" when issuing travel bans.

Chua spoke to reporters at a Goods and Services Tax talk after the launch of Urbach Hacker Young's (UHY) GST app here yesterday.

The outstanding amount owed by the 97,343 defaulters amounted to RM2.88bil($1.14billion).

This year, 8,332 new names were added to the defaulter list, with cumulative unpaid taxes totalling RM162.97mil.

In Johor Baru, business groups feel that stopping tax defaulters from leaving the country should be the last resort taken by the IRB.

"If they still refuse to pay despite notices being served on them, only then should they be summoned to court, and let the court decide on the suitable punishment," said Johor Indian Business Association (Jiba) president P. Sivakumar.

He added that there could be genuine or emergency cases which required tax defaulters to leave the country.

SMI Association of Malaysia National president Teh Kee Sin said it was the responsibility of tax payers to settle their dues on time as money collected would be used for development.

"At the same time, the IRB should be more considerate and be willing to listen to first-time offenders as we sometimes overlook certain things in life," he said.

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