THE Inland Revenue Board (IRB) has assured that it has only been granted the power to obtain taxpayers’ bank account information for cases where a garnishee proceeding has been instituted by a court, it said in a statement.

The tax authority said this is stipulated in section 106A of the Income Tax Act 1967, which was part of the Finance Bill 2021 tabled in the Dewan Rakyat on Wednesday.

A garnishee proceeding is a process used to pursue outstanding debts the respondent has failed to pay or comply with.

A garnishee order refers to an order whereby a garnishee would be summoned to court to show cause why an order should not be made against the said individual before a hearing.

“The IRB is not given absolute power under the new provision to arbitrarily access bank accounts,” it said in a statement. 

“This has to undergo the necessary judgment process and will only be limited to cases that have been subjected to civil proceedings,” it added.

Therefore, it reiterated that the tax authority will only proceed to access bank account information after a garnishee order has been issued by the court.

It added that bank account information will not be accessed if it does not involve a garnishee proceeding. 

The taxman said the introduction of the provision will allow the IRB to manage the country’s direct tax regime effectively, minimise leakages resulting from taxpayers’ failure to pay their taxes and increase tax compliance. 

The bill created anxiety that the tax authority will be able to access bank account information of taxpayers for review and investigation arbitrarily and without prior consent. – December 18, 2021.