Taxpayers will no longer be informed or need to give their consent for the Inland Revenue Board (LHDN) to have access to their bank account details for review or investigations, according to local media reports
The Vibes reported that the Dewan Rakyat has passed the Finance Bill 2021 today, 15 December, and one of the amendments, Section 106A of the Income Tax Act 1967, grants powers to LHDN to access bank account details of taxpayers for the purpose of making garnishment application purposes.
Under the amendments, LHDN will also no longer have to inform taxpayers when requesting their bank account details from banks for review or investigation, reported Sin Chew Daily.
Furthermore, the banks are not allowed to disclose to anyone that such a request has been made.
The Sin Chew Daily quoted tax expert Koong Chin Loong saying that in the past, taxpayers were required to sign a consent form before banks were allowed to furnish relevant information to authorities.
Banks refusing to comply with such requests by the specified timeline or in the event that it discloses such requests by the tax department to any person, the banks shall be be found guilty of an offence
The banks are liable to a fine of between RM200 and RM20,000, or a maximum of six months’ jail, or both.
The Personal Data Protection Act (PDPA), which was enacted to protect confidential information, will not be applicable when enforcing Section 106A in the future as banks will no longer need to obtain consent from bank account owners before furnishing any information to LHDN, the Sin Chew Daily report said.
According to Finance Deputy Minister I Mohd Shahar Abdullah, the new provision is needed to ensure smooth garnishee proceedings
The Vibes quoted Shahar saying that if banks were to inform their account holders of potential garnishee proceedings, it is possible for the debtors to remove all of their monies from the bank.
“This would ensure that the garnishee procedure cannot be carried out, hence the rationale behind introducing the amendment. Further, we have already consulted Bank Negara Malaysia before suggesting amendments,” he said while debating the bill in the Dewan Rakyat today.