Malaysians warned to check tax status to avoid travel bans
Malaysia’s tax authorities are increasingly using travel bans to collect outstanding taxes, with some travellers stopped from travelling for just a few hundred ringgit.
Thannees Tax Consulting Services managing director SM Thanneermalai told the Malaysian Sun website that the Inland Revenue Board (IRB) and the Royal Malaysian Customs Department (RMCD) were implementing travel bans even in cases where the tax matter is under appeal.
He said the only avenue to remove the stoppage order is to immediately settle the outstanding taxes or enter into an arrangement to partially pay the tax.
“If the outstanding amount is completely settled, the order will be completely removed. However, if the taxpayer partially settles the tax that is agreeable with the authorities, there will be a temporary removal of the stoppage order,” he said.
“In the case of IRB, for a temporary removal of the stoppage order, they require 50% of the outstanding taxes to be paid immediately. Similarly, RMCD requires at least 10% of the outstanding taxes for a temporary removal of 14 days, and for a longer removal, at least 30% of the outstanding taxes should be paid and an instalment arrangement entered into with RMCD. Upon obtaining the temporary removal of the stoppage order, the taxpayer must immediately negotiate an instalment plan to settle the outstanding taxes.”
Stoppage orders can be used to collect outstanding taxes arising from income tax, real property gains tax, sales tax, service tax, customs duties and excise duties.
All individual taxpayers will be affected by the stoppage order, either at a personal level, or indirectly through the positions held in other taxable bodies such as companies, trusts, LLPs and other body corporates.
Thanneermalai said the most common example would be directors of companies. He said: “In the event the company’s tax liabilities are not settled, IRB can issue stoppage orders to the directors who are involved in the management of the company and own more than 20% of the company’s ordinary shareholding. However, when it comes to indirect taxes such as customs duties, sales tax, service tax, GST, etc, all directors of the company can be issued a stoppage order.”
He added that every taxpayer should check with the immigration portal (https://sspi.imi.gov.my/sspi/) on their travel ban status before departing Malaysia. Thanneermalai said: “There are cases where innocent taxpayers have been unnecessarily stopped. It is high time IRB and RMCD ensured that the stoppage orders are communicated to the correct addresses of the individuals so that they are aware well in advance of the outstanding taxes.
“If they become aware of their outstanding liabilities, there will be a tendency to settle their taxes or to get the organisation to ensure that its taxes are settled. This is a win-win situation for both the tax authorities and taxpayers.”
AI Code of Ethics set to be unveiled
Malaysia’s Artificial Intelligence (AI) Code of Ethics is at more than 90% complete and will be launched at the end of this month, according to Science, Technology and Innovation Minister Chang Lih Kang.
“The AI Code of Ethics is expected to be launched at the end of February, it has reached the final stage. Once we launch it, we will provide more details, and we will conduct a press conference. Currently, it is at over 90% completion,” he said.
He previously stated that a special committee, established under the Ministry of Science, Technology and Innovation, was actively working on creating a comprehensive framework for AI technology.
The Malaysian Standards Department (JSM), which provides standardization and accreditation services for global competitiveness, has already set up a National Mirror Committee to develop national AI standards, he added.
Malaysia’s National AI Roadmap 2021-2025 outlined seven AI principles – privacy, security, fairness, inclusivity, transparency, accountability and pursuit of human benefits and happiness – that could guide the country in its adoption of AI technology.
