Tax Defaulters Barred From Leaving The Country


Image courtesy of Stuart Miles / FreeDigitalPhotos.net

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

In a move to intensify  efforts to target taxpayers who fail to pay their outstanding tax debt, the Inland Revenue Board (IRB) on 2 October, 2013, issued a press release on tax defaulters barred from leaving the country.

Following the issuance of a reminder letter and notice of outstanding tax to the tax defaulter, a taxpayer will be prevented from leaving the country under Section 104 of the Income Tax Act 1967 (ITA 1967) and Section 22 of the Real Property Gains Tax Act 1976 (RPGTA 1976), unless and until the taxpayer pays all the tax debts.

The stoppage order is invoked only after various attempts to collect tax arrears have failed due to resistance by the tax defaulter.

Taxpayers are advised not to ignore notices of outstanding tax and are advised to contact IRB to arrange for installment payment schemes based on the information provided for consideration.


In practice, I have known of cases where a taxpayer is unaware of such notice issued against him and will only be aware of this embarrassing situation when he gets barred from leaving the country at the immigration checkpoint and have his passport confiscated, while the rest of his family/friends go on their vacation without him! The taxpayer may not have received the relevant stop-travel notice due to several reasons, such as not notifying the IRB of his change of correspondence address or the notice being lost in transit.

For those of you who have outstanding tax position and are concerned whether you have being barred from leaving the country, please visit the Immigration Department’s link below and check your travel status for yourself:

http://sspi2.imi.gov.my/

You are advised to check your status at least 14 days before your actual travel dates so that you have ample time to negotiate with the IRB for a payment arrangement of your outstanding taxes and obtain the necessary clearance letter from the IRB.

To read the IRB’s press release on the above, please visit the following link:

http://www.hasil.gov.my/pdf/pdfam/Barred_from_Leaving_the_country_for_Tax_Defaulters.pdf

About Richard

Richard Oon Hock Chye has more than 25 years of experience in taxation and business advice, with particular expertise in Malaysian property law. He began his taxation career with Deloitte Touche Tohmatsu, a ‛Big Four’ accounting firm, before starting his own practice, ConsulNet Tax Services Sdn. Bhd., in 1996. He is currently the National Tax Director of TY Teoh International, one of the leading consulting service providers in Malaysia. It is a member of the MSI Global Alliance, a global network of more than 250 independent legal and accounting firms, in over 100 countries. Richard sits on the board of two companies listed on the Main Board of Bursa Malaysia, as an independent non-executive director. He is also a regular contributor to several magazines and publications, and has shared his tax expertise on numerous occasions with organisations and property developers. As well as being a member of the Malaysian Institute of Accountants (MIA), Richard is a fellow member of both the Association of Chartered Certified Accountants (ACCA) and the Chartered Tax Institute of Malaysia (CTIM). He is a Certified Financial Planner (CFP) and holds a tax agent licence issued by the Ministry of Finance. Richard is also the author of the book, ‘Every Property Investor’s Guide To How To Pay Less Tax Legally’.

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