IRB: Access to taxpayers’ bank accounts limited, court order needed

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KUALA LUMPUR (Dec 18): The Inland Revenue Board (IRB) has clarified that the new Section 106A under the Income Tax Act 1967 which grants it access to taxpayers’ bank account information is limited to cases involving garnishee orders allowed by the court.

In a statement, it said garnishee proceedings are the process of enforcing a monetary judgment by seizing or withholding debts due to any party, such as IRB amid the existence of unpaid tax arrears by the taxpayer.

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

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

Meanwhile, taxpayers who are discharging their tax obligations should not be worried about the new provision, as it does not apply to them, IRB said, emphasising that it cannot access accounts of taxpayers without a court order.

The Dewan Rakyat on Dec 15 passed the Finance Bill 2021, which includes the introduction of Section 106A in the Income Tax Act 1967.

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

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