KOTA KINABALU: The Federation of Chinese Associations Sabah (FCAS) president Tan Sri Dr T.C. Goh has urged enforcement agencies, namely the Malaysian Anti-Corruption Commission (MACC) and the Inland Revenue Board of Malaysia (LHDN), to apply relevant laws in their investigations.
Goh said there was a major flaw in the legal system of Malaysia whereby the MACC and LHDN would investigate alleged graft or tax evasion cases under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001.
“This is even more serious than the Internal Security Act (ISA).
“No one dares to oppose to it (Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001) because if you do, it gives the impression that you are supporting terrorism.”
Under the Income Tax Act 1967, Goh said LHDN would have to prove an individual had indeed committed tax evasion. Consequently, he said the person could either repay LHDN or challenge the agency’s order in court.
On the contrary, if an individual is investigated under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001, the burden of proof is on the individual whereby he or she has to prove that their money came from legitimate sources, he explained.
“If you cannot prove (your innocence), your accounts will be frozen,” he said at the 2018 Budget seminar organized by the Economic Bureau of FCAS here yesterday.
As such, Goh hoped that the authorities could apply the relevant laws when carrying out enforcement to ensure fairness for the rakyat.
Additionally, Goh said the statutory of limitation for record keeping for filing of income tax return is seven years. However, he said should the LHDN decided to investigate a company under the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act, the company would be required to prove the source of its monies beyond that period of time.
“This shows that companies have to be more cautious in storing their documents.”
In addition, Goh raised the issue of ambiguity pertaining to Real Property Gains Tax (RPGT) or taxable income for the sale of holding property for investment owned by a company.
He said the sale of a company-owned property would be subjected to five per cent of RPGT when it was put up for sale after five years.
“But if LHDN sees the sale of the property as a taxable income, the company will be subjected to 20-25 per cent tax,” he said.
On another note, Goh reiterated that the corporate and individual tax should both be lowered following the imposition of the Goods and Service Tax (GST).
“In the 2018 Budget, the government has seemingly listened to our voices and announced the reduction of income tax by two percentage point for individuals earning below RM70,000 annually.
He added that businesses should be aware of fines imposed on businesses for late penalty or errors in filing GST with the authority.
Meanwhile, FCAS vice president cum Economic Bureau chairman Datuk Chua Soon Ping said the seminar aimed to enlighten Chinese businesses on the impact of 2018 Budget, as well as economic trends for the future.
“Through the experts’ analysis and sharing, we hope that Chinese businesses could discover opportunities in the new budget,” he said.
Also present were Sabah Association of Tour and Travel Agents president Datuk Seri Winston Liaw, Huang Association of Malaysia president Datuk Wong Ten An and the United Sabah Chinese Communities Association of Kota Kinabalu president Datuk Susan Wong.