LHDN Can Now Access Taxpayers' Bank Accounts Without Informing Or Seeking Permission

Dewan Rakyat has passed the Finance Bill 2021 on 15 December 2021 and one of the amendments, Section 106A of the Income Tax Act 1967.

01Section 106A ITA 1967

New S106A ITA 1967 fall under Part VII Collection and Recovery of Tax

LHDN will also no longer have to inform taxpayers when requesting their bank account details from banks for review or investigation.

The banks are not allowed to disclose to anyone that such a request has been made.

The taxpayer was, in the past, required to sign a consent form before banks were allowed to furnish relevant information to LHDN.

02What happens if you fail to pay taxes?

LHDN can execute the judgment against you. One of the normal methods used by LHDN is garnishee order.

03What is Garnishee Proceeding?

A garnishee proceeding is a process of enforcing a money judgment by the seizure or attachment of debts due to the judgment debtor that forms part of his property available in execution.

In short, a civil proceeding is instituted against a taxpayer. A judgment has been obtained against that taxpayer for LHDN to obtain taxpayer’s bank account information from the financial institutions.

04Final words

If you don’t owe any tax due, are you worry?

05Further reference

See our past posting on LHDN tax recovery action

• 14/8/2021 : 4 methods LHDN recover tax https://www.ktp.com.my/blog/what-happen-if-you-fail-to-pay-tax-chinese/24aug21
• 3/12/2021: What should you do once LHDN obtain judgement against you?https://www.ktp.com.my/blog/what-is-tax-recovery-action-lhdn/03dec21

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