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Will Section 106A Let LHDN Access Your Bank Accounts?

Will Section 106A Let LHDN Access Your Bank Accounts?

Will the Section 106A amendment let LHDN access your bank accounts, without consent or knowledge?

Let’s take a look at the controversial amendment, and find out what FACTS really are!

 

Section 106A : Does It Let LHDN Access Your Bank Accounts?

Section 106A was just added to the Income Tax Act 1967, with the passing of the Finance Bill 2021 on 15 December 2021.

This section empowers the Inland Revenue Board (LHDN or HASiL) to access bank account information for the purpose of making garnishee order applications.

The director-general may, by notice under his hand, require any financial institution to furnish, within a specified time in the notice, the bank account information of that person, if any, or the purpose of making an application to court for a garnishee order

A garnishee order is used by creditors to collect debts from debtors by “garnishing” their bank accounts, and is nothing new.

However, much was made about Subsection (2) which states that financial institutions ordered to furnish the bank account information will not be allowed to disclose to anyone that such a request has been made.

So what’s really going on?

 

Section 106A Lets LHDN Access Bank Accounts For A LIMITED Purpose…

Many people have been sharing articles on Section 106A, claiming that it will allow LHDN to collect information on how much money they really have, in order to collect additional taxes.

Some even suggested (jokingly or otherwise) that people should withdraw their cash to keep at home, to avoid LHDN “garnishing” their hard-earned money.

The truth is – Section 106A only lets LHDN access bank account information for a specific and LIMITED purpose.

Let me summarise the key points :

  • LHDN can only ask for your bank account information for the explicit purpose of making a garnishee order application.
  • Before such a garnishee proceeding can begin, you would have already undergone a civil proceeding, which ended with a judgement against yourself.
  • Hence, the requirement that the Director-General must have a “notice under his hand”, before LHDN can proceed with the garnishee order application.
  • Before LHDN can make a garnishee order application, it must know which bank accounts you have. This is where they use Section 106A to make that request to the bank.
  • Only once LHDN has obtained your bank account information, can it make an application to the court for a garnishee order, to recover the tax you owe.
  • Subsection (2) prohibits financial institutions from informing you about such potential garnishee proceedings, to prevent you from moving your money out of those bank accounts.

Section 106A does NOT allow LHDN to request for bank account information for other purposes, whether it is to determine how rich you are, or for tax audit purposes.

Section 106A is also limited to banks, including Islamic banks and development financial institutions. It does not extend to investment fund accounts, so it wouldn’t really help LHDN in looking for people evading taxes.

 

Section 106A Access To Bank Accounts : Official LHDN Statement

On 18 December 2021, LHDN issued a press statement clarifying its access to your bank account. It is in Bahasa Malaysia, so here is my English translation :

ACCESS TO TAXPAYER BANK ACCOUNT HAS LIMITS

Inland Revenue Board (HASiL) refers to several news reports about HASiL’s power to access taxpayer bank accounts without first obtaining the account holder’s consent.

HASiL would like to clarify that the new S106A amendment of the Income Tax Act (ACP) 1967 that was approved in the Finance Bill 2021 on 15 December 2021 has granted HASiL the right to obtain taxpayer bank account information only for cases that involve garnishee orders in any court that has decided to allow the garnishee proceeding.

Garnishee proceeding is a process to enforce monetary judgements by seizing or freezing debts that must be repaid to any party, in this case HASiL, if there are tax arrears that have not be paid by the taxpayer.

This new amendment will help HASiL administer the country’s direct tax system more effectiveness by minimising tax leakage by taxpayer’s failure to pay their existing tax arrears, while increasing the rate of voluntary tax compliance.

Nevertheless, the power under this new amendment does not give HASiL absolute power to access taxpayer bank accounts frivolously. It must undergo a specific judicial process, and is limited to accesses that have already undergone civil proceedings earlier.

Taxpayers who are willing to handle their tax obligations in an orderly manner do not need to worry about this S106A ACP 1967 amendment as it does not apply to them.

In conclusion, the new S106A ACP 1967 amendment only gives HASiL the power to obtain taxpayer bank account information after garnishee proceedings are permitted by the court. HASiL once again stress that taxpayer bank account information that do not involve garnishee action cannot be accessed by HASiL through this amendment.

 

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Scam Alert : Bank Negara Malaysia Scam Email!

Bank Negara Malaysia is warning the public about an email scam using their board member to scam victims of their money!

Find out what this Bank Negara email scam involves, and make sure you WARN your family and friends!

 

Bank Negara Malaysia Email Scam : Watch Out For It!

You may have received this email purporting to be from Chin Suit Fang, a Bank Negara Malaysia board member, and Chairman of the Board Audit Committee.

It warns you that you have just 48 hours to address an outward payment from your bank account (not necessarily RHB), or Bank Negara Malaysia will freeze your account for investigations.

Bank Negara Malaysia confirmed that this is a fake scam email, even though Chin Suit Fang is really on the Board of Directors for BNM, and that’s really her photo.

 

Bank Negara Malaysia Email Scam : Why It’s Fake

For those who want to learn more how to spot such email scams, and specifically why this Bank Negara Malaysia email is a scam, here are the details :

Tip #1 : Check The Email Address

If you check the email address, you will see that it’s from BNM.gov.my@banknegaramalaysia.onmicrosoft.com.

That is not a valid Bank Negara Malaysia email account, which always ends with @bnm.gov.my.

Tip #2 : Do You Really Have That Much Money?

It is impossible for Bank Negara Malaysia to question you over such a large transfer when you don’t have that much money in the bank in the first place!

Tip #3 : Did You Really Transfer That Much Money?

If you really have that much money, did you really transfer so much out?

First thing to do is NOT to respond to the email, or click on any link.

No, the first thing you should do is check your bank account. If there has been no such transfer, the email is evidently false.

Tip #4 : Bank Transfers Are Generally Limited To RM50K A Day

Unless you performed the transfer over-the-counter at the bank, and submitted a Bank Negara Malaysia declaration form, it is simply impossible to transfer more than RM50,000 a day.

Online transfers are limited to just RM50,000 a day, and in some cases, to just RM20,000 a day.

Tip #5 : Bank Negara Malaysia Directors Will Not Email You 

Even if you are in the habit of transferring half a million ringgit to other people (call me please?), Bank Negara Malaysia will not email you to ask you about it.

If they require you to submit documents, you can be assured that it will be by an official letter.

Even if you are a famous personality or a politically significant person, no Bank Negera Malaysia director is going to write you an email.

Do you really think it is the job of a BNM director to write demand letters?

Tip #6 : Why Would They Include Their Personal Picture?

Why on Earth would any person include their personal picture in an official email?

Heck, do YOU even include a picture of yourself in your emails to your family and friends? Of course, not!

The only reason why scammers do this is to trick you into believing that this is really an email from a Bank Negara Malaysia director.

Tip #7 : Look At The Horrendous Grammar

The email isn’t even well-written, with bad grammar and odd capitalisation of various words.

Is this the kind of email a Bank Negara Malaysia director would pen? Seriously?

No, this is the kind of English that is written by someone with a poor command of the English language.

 

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Takaful & Allianz Malaysia Receive Top Motor Insurance Awards

iBanding Services recently awarded Syarikat Takaful Malaysia and Allianz Malaysia for the Best Motor Takaful Company and Best Motor Insurance Company in 2016 respectively. The awards were based on the results of a study conducted by iBanding, which ranked insurance companies in Malaysia on actual feedback from Malaysian motor vehicle drivers.

The study revealed that Syarikat Takaful Malaysia customers are the most satisfied with their insurance services and recommend the motor insurance company to their family and friends more often than other companies. Takaful insurance holders quoted price, quality of service and policy benefits as the top three reasons why an insurance company is preferred.

 

The iBanding Motor Insurance Awards

iBanding’s recognition of Syarikat Takaful Malaysia and Allianz Malaysia as the best motor insurance providers in 2016 is not like any other award within the industry. Besides providing valuable insights from its annual study, iBanding’s yearly ranking of motor insurance companies for both Conventional and Takaful motor insurance provides consumers with the knowledge and confidence to choose the best insurance company that is right for them.

Luke Roho, Co-Founder of iBanding elaborates, “For the past 30 years, Malaysians do not feel that it was necessary to shop around to compare different motor insurance policies. This was because motor insurance prices have been regulated by a tariff structure, which is set by Bank Negara Malaysia. This will change with the introduction of Motor Detariffication in July this year. With the implementation of Motor Detariffication, motor insurance prices are no longer regulated.

This means that insurance companies will be able to set their own prices and offer a variety of differently priced services to consumers. However, lower price does not mean that the service offered is better. Our motor insurance ranking and insurance award will help consumers decide what company is best for them based on price and service quality. Ideally, consumers want to buy insurance with the best service and lowest price.

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Roho added that consumers will have to be ready for the changes that follow Motor Detariffication, “After detariffication is implemented, consumers may find buying motor insurance to be a bit more complicated. This is because insurance companies or agents will now ask a lot more questions. This additional information will help insurance companies decide if you are a safe driver or a risky driver, which will ultimately affect the price of the insurance plan.

If the insurance company decides that you’re more of a risky driver than a safe one, the price of your insurance will be higher. This means that two individuals purchasing the same car model may have to pay different insurance prices based on various considerations like occupation and traffic violations. With so many options to consider, it can be overwhelming especially for first time buyers. iBanding helps consumers select the right company through its annual Motor Insurance Award.”

 

 

How The Survey Was Conducted

The Study is based on the Net Promoter Score (NPS) methodology, which closely examines customer satisfaction. iBanding’s Study also uses statistical methods and fraud detection parameters to ensure unbiased results.

From 4,000 unsolicited responses received nationwide in 2016, 2,600 responses were accepted, with Syarikat Takaful Malaysia scoring the highest for Islamic Insurance or more often called Takaful, and Allianz Malaysia for Conventional Insurance.

 

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