The Finance Ministry must assure taxpayers that there is no arbitrary and high-handed freezing of bank accounts to ensure that IRB keep to its “No U-turn” promise not to investigate past taxes 2018 and before, of those participating in the Special Programme for Voluntary Disclosure or tax amnesty programme. Whilst IRB has denied allegations of a U-turn, there should be no return to the bad old days of the BN administration, of “shaming” taxpayers by raiding their offices with hordes of officers and freezing their bank accounts.
The tax amnesty programme was implemented from 2018-2019 when I was Finance Minister, to overcome the previous problem of compliance issues by taxpayers and abuses of power by IRB that did not meet the basic rule of law and requirements of natural justice. The IRB in their statement two days ago said that, through the programme, taxpayers were assured the board would accept their voluntary disclosures of income in good faith and that they would not be investigated in the future.
Such assurances were also given during the tax amnesty in 2018-19 in the press. Any failure to fulfil that promise can be challenged and won in court. By offering only a penalty of 10% and then 15% as compared to the maximum of 300%, 286,428 taxpayers participating in the programme paid RM7.877 billion, which could have been much higher if the full penalty was imposed. I have offered myself as a witness in court on behalf of the 286,428 taxpayers, should action be taken by IRB that break this legally enforceable written promise.
There is no reason to investigate past taxes of 2018 and before of those participating in the tax amnesty programme, unless they are involved in illegal or criminal activities such as drugs, prostitution or illegal gambling and corruption. Jho Low would not escape and is not disclosing his income in good faith by participating in the tax amnesty, which does not provide immunity either from prosecution or further tax audits and investigations.
IRB has said that it relies on the honesty of the taxpayer. Such a requirement is mutual in that IRB must also act honestly. IRB is bound by their standard letter of proposing a tax assessment where they have agreed upon. (see below) In other words, such agreement can only be made after IRB has conducted a comprehensive assessment.
Whilst the unelected PN government may wish to reverse the policies of the PH government, they must not unnecessarily victimise 286,428 taxpayers.