Govt urged to resolve issues burdening businesses, taxpayers
The government has been urged to resolve issues burdening businesses and taxpayers so as to bring back better economic times.
“Over-stringent vetting of bank loan applications and unreasonable Inland Revenue Board (IRB) action are burdening businessesmen and taxpayers and hampering economic progress,” said Taren Sunil Manoharan, president of the Sandakan Indian Association (SIA).
Taren Sunil added that bank loans are very important for businessmen to grow and expand their business and trade.
“The major issue for many people is that now, during this current economic downturn especially in the agricultural sector i.e. rubber and palm oil, banks are pulling out their support even when the assets and properties under loan are worth much more than the loans themselves. It is unfair and downright cruel. It could cause chaos in the financial liquidity of a company and even result in closure, forfeiture and bankruptcy. Instead, banks should consider extending additional loans to help businesses ride over their tough times. At the very least banks could restructure loan repayments so that businessmen will be able to manage their finances better during these bad times,” he said.
He also pointed out that Bank Negara and even our ministers have been raising these issues about easing conditions for loans with the banks but apparently they are falling on deaf ears.
“Even on the rare occasions when they listen, these banks will heap many conditions some of which are almost impossible to fulfill,” said the SIA president.
“We want them to at least give businesses a chance to survive even if more collateral is needed or additional guarantors are needed. At least a business can be saved rather than end in bankruptcy. I really hope and appeal to the government to seriously persuade banks to act fairly and be more business friendly,” he said.
“Meanwhile, to make matters worse, we also have the IRB hounding taxpayers, especially businessmen. The sad thing is that they are so rigid in applying their ‘standard operating procedures’ that they sometimes overlook local practices and laws such as those practised in Sabah and Sarawak,” he continued.
“While we understand that the IRB enforcers are ‘just doing their job’, their over-eagerness sometimes lead them to wrongly over-assess the income of taxpayers. The person or company is then forced to pay the entire estimated amount first – even if an appeal to them has been lodged. Although we accept that this is the law, the taxpayers will be victimized. Therefore we urge the government to look into each case individually based on merit.”
Taren Sunil gave an example where in Sabah it is common practice that anyone including companies can lease native land. However, when they sell those leasing rights, the IRB considers it to be “dealing in land” whereas in actual fact the company was just selling off part of a plantation lease - probably to reduce their borrowing, etc.
As a consequence, instead of the normal 5% RPGT (after the minimum years of holding), they are taxed 25% or more under personal tax.
IRB should take note of the dissimilarity between laws in Sabah and Sarawak and those of West Malaysia and implement tax laws accordingly and fairly in line with local conditions.
“Because of this 25% tax ruling, companies may be forced to sell off some of their assets to pay IRB. But later, when they win their appeal, what would they do? It is hoped that the government will relook at this very important issue as businesses could go bust and entire families financially ruined by this kind of unfair policy,” stressed Taren Sunil.
He also pointed out that the cost of making the appeal incurs fees for consultants and lawyers which are not cheap. The appeal may also take years to be heard and decided, during which the taxpayers could only wait helplessly.
“It’s a shame to enforce this kind of unjust ruling that clearly victimizes the taxpayers. The government must do something about this to help ease the burden of businessmen and ordinary taxpayers and thereby bring about better economic times for our country,” he summed up.