Forward    Feedback    


Petaling Street Incident On 27 July 2006 Reveals A Type Of Tax Collection Intimidation And Profiling Against The Business Community That Is Excessive And Discrimnatory.

Press Statement

by Lim Guan Eng

(Petaling Jaya, Wednesday):


Y. Bhg. Tan Sri Dato' Zainol Abidin Bin Abd. Rashid



Tingkat 15, Blok 9, Kompleks Bangunan Kerajaan,

Peti Surat 11833, 50758 KUALA LUMPUR.                              

                                                                                 DENGAN TANGAN


Yang Bhgia Tan Sri,


Petaling Street Incident On 27 July 2006 Reveals A Type Of Tax Collection Intimidation And Profiling Against The Business Community That Is Excessive And Discrimnatory.


We, amongst us the Federal Territory MP for Bukit Bintang YB Fong Kui Lun, MP for Cheras YB Tan Kok Wai and MP for Seputih YB Teresa Kok, wishes to express our grave concern and public disquiet over the above incident.


Whilst over 300 LHDN officers coming to give tax advice and reminders to pay taxes on time to hawkers in Petaling Street in Kuala Lumpur is welcomed, the accompanying four truckloads of police personnel wielding sub-machineguns is definitely not friendly. This must be the first time that LHDN officials are accompanied by heavily armed policemen only when giving advice.


The repercussions of using policemen with sub-machineguns to accompany LHDN in carrying out their duties that day affected the business climate of the area by giving an impression that either a serious crime has happened or a lack of security. Malaysia is not under threat from any terrorist attack and many customers quickly left the area upon seeing so many heavily armed policemen.


There is public alarm at such show of force not only in Petaling Street but also other businessmen in the country who have called us to express their unhappiness over such methods. Businessmen feel intimidated if LHDN have to resort to such methods to increase tax revenue. Which developed country requires heavily armed policemen to accompany tax officers giving advice? Are LHDN officials going to be accompanied by army tanks and helicopters when they go around collecting tax?


Further as Petaling Street is the main Chinatown in Kuala Lumpur, such actions also gives rise to questions why it is being introduced there giving rise to unhealthy suspicions that the hawkers of Petaling Street is targeted. Petaling Street legal hawkers are law abiding people and do not resort to violence. The Petaling Street incident on 27 July 2006 reveals a type of tax collection intimidation and profiling against certain sections of the business community that is an excessive use of power and discriminatory.


Resorting to such display of force is contrary to LHDN’s motto of Friendly Helpful & Satisfying Service. To be a world-class tax collecting agency must be efficient, fair and treat everyone equally. We have received complaints that LHDN’s newly employed staff to do tax audits and investigations are not fully trained and caused unnecessary hardship to businessmen already burdened by a deteriorating and difficult business conditions.


Whilst the LHDN is a collecting agency enforcing the laws set by Parliament, we hope that the LHDN can support some of the proposals made by the Malaysia Institute Of Taxation to make tax collection fairer, efficient and more transparent. We wish to also propose that the penalty of 10% on the difference between the tax payable and estimated tax be removed as unnecessary burden and expense to businesses throughout Malaysia.


Under the self-assessment system(SAS), every company is required to submit an estimate of tax payable of not less than 85% of the revised tax estimate for the immediately preceding year. In the event that the actual tax payable exceeds the estimated tax by an amount of more than 30% of the actual tax payable, the company shall be liable to a penalty of 10% of the difference.


In view of the confusion and new requirements over the SAS, tax consultants and those who help to prepare them are in demand. Accordingly the decision this year to remove such tax consultation fees as a deductible expense is illogical as tax preparation is an essential part of any business operation in carrying out its business for profit. We wish to request that tax consultation fees as a deductible business expense be reinstated.


For a LHDN to be friendly, helpful and satisfying it must practice what it preaches. Such incidents in Petaling Street must never be repeated and officers responsible for it given proper management counseling. Whilst LHDN has improved the tax collection by 6.5% to RM105.8 billion for, this primary concern of increasing collection of taxes, it must not be done at all costs at the expense of the welfare of the business community and taxpayers.




Yours faithfully,








* Lim Guan Eng,  Secretary-General of DAP

Your e-mail:

Your name: 

Your friend's e-mail: 

Your friend's name: