(TAX UPDATE) Unclaimed Money: What That Government Inspection Letter Really Means

(TAX UPDATE) Unclaimed Money: What That Government Inspection Letter Really Means

Introduction

Recently, one of our clients received an inspection notice from the Unit Wang Tak Dituntut, Jabatan Akauntan Negara Malaysia, Negeri Johor. We are pleased to share what the letter involved and to remind you about your duties under the Unclaimed Moneys Act 1965.

Inspection Notice

Under Section 12(1) of the Unclaimed Moneys Act 1965, the Registrar of Unclaimed Moneys or an authorised officer may inspect your books, registers, records, and documents to confirm that your company complies with the Act.

A notice of this kind sets an inspection date and asks the company to take three actions.

  • Prepare documents : Get your books, registers, records, and documents ready as listed in Appendix A.

  • Complete Appendix B : Fill in Appendix B with the details of the company representative who will handle the inspection, and return it no later than seven days before the inspection date to the email address given.

  • Be present : Ensure that you or your representative is present with the Inspector throughout the inspection.

Failure to cooperate may result in a fine not exceeding RM5,000, or imprisonment not exceeding three months, or both, under Section 12(4) of the Unclaimed Moneys Act 1965.

About the Unclaimed Moneys Act 1965

The Accountant General has acted as the Registrar of Unclaimed Moneys since 1 June 1975, appointed by the Minister of Finance. The Act gives the Registrar the following roles.

  • Trustee for unclaimed money : Holds unclaimed money received in trust.

  • Refunds to claimants : Refunds unclaimed money to rightful owners, at any time and at no charge.

  • Compliance enforcement : Inspects company and firm records to ensure compliance.

  • Penalties : Recommends compounds and penalties for non-compliance.

What is unclaimed money?

The Unclaimed Moneys (Amendment) Act 2024, in force from 1 August 2024, extended the first category from one year to two years. The current position is as follows.

  • Unpaid obligations: Money legally payable to a person or company but unpaid for at least two years. Examples include salaries, wages, bonuses, commissions, dividends, profits declared for distribution, approved insurance claims, expired bank drafts and cashier's orders, matured fixed deposits without automatic renewal, and sundry creditor or sundry debtor balances in credit.

  • Dormant bank accounts: Accounts not operated in any way by the owner for at least seven years, including savings accounts, current accounts, and fixed deposits with automatic renewal.

  • Dormant trade balances: Trade creditor or trade debtor accounts with a credit balance that have stayed dormant for at least two years.

If you run an SME, the first and third categories are where the exposure usually hides. Think of that old creditor balance nobody has touched, or the final salary a resigned employee never came back to collect.

How to register and lodge unclaimed money

Under Section 10, the duty runs every year, whether or not an inspector ever visits.

  • Record keeping: Maintain a register of all unclaimed money at your principal office or place of business, and submit a copy for publication in the Gazette.

  • Annual submission: The register covers all unclaimed money as at 31 December of the previous year, and must be lodged with the Registrar no later than 31 March. Since 2024, submission is done online through the eGUMIS portal, together with the UMA-4 form and proof of payment.

For detailed guidance, refer to the Guideline on Submission of Unclaimed Money (2025 Edition) on the JANM website.

Consequences of non-compliance

  • Fines: On conviction, the company and every officer in default may be fined up to RM20,000.

  • Continuing offence: A further fine of up to RM1,000 for each day the offence continues.

Under Section 16, with the written consent of the Public Prosecutor, the Registrar may compound the offence at an amount not exceeding 50 percent of the maximum fine, and a party who pays the compound is not prosecuted. Compounding is a mercy, not a right.

JANM has stated that it has never appointed any individual, firm, or company as an agent or middleman for unclaimed money matters. You can claim directly from the Registrar, at any time, free of charge. If someone offers to recover unclaimed money for a fee, treat it as a red flag.

KTP's View

We see the same pattern every year. A healthy business, good products, loyal customers, and a corner of the balance sheet nobody has looked at properly in years.

The Unclaimed Moneys Act does not exist to punish that. It exists because the money belongs to someone, and the law wants it returned rather than quietly absorbed. An inspection letter is uncomfortable, but it is really a prompt to clean house.

Build the register once, keep it current, lodge every March, and the inspection becomes a formality rather than a fright. If the letter has already arrived, do not negotiate with the deadline. Prepare, cooperate, and get proper help early.

Should you have any questions or need assistance with your Unclaimed Moneys register or an inspection, please do not hesitate to contact us.

This article is general information on Malaysian law and compliance and is current as at the date of publication. It is not advice on your specific facts. Verify against the Unclaimed Moneys Act 1965 and current JANM guidance, or speak to professional, before acting.

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