Lawyer: Sue IRB if tax refund unpaid

Judicial review can be filed within six years

PETALING JAYA: Taxpayers who have not received income tax refunds can file a civil action against the Inland Revenue Board (IRB).

S. Saravana Kumar, a tax lawyer with Lee Hishammuddin Allen & Gledhill, said the law provided a recovery period of six years from the due date of a debt.

“If the IRB is unable to provide a time frame, taxpayers can file a judicial review on the basis of being denied the refund or that the IRB has not responded to the (taxpayer’s) request for the refund,” he said.

Finance Minister Lim Guan Eng recently claimed that RM16.046bil in excess income tax and real property gains tax had not been refunded to taxpayers for over six years.

Saravana said taxpayers must exhaust all avenues in their attempt to recover the refund before taking legal action.

He also advised taxpayers to act swiftly and record all their efforts to recover their refund.

He said in 2011 the High Court told the IRB to refund his client RM2.36mil plus interest.

The Pakatan Harapan government considered allowing taxpayers with outstanding refunds to apply to offset the amount against the tax payable for the current year.

To this, Saravana said the government should put this assurance in writing to the taxpayers.

Tax consultant Harvindar Singh from Harvey & Associates said the delay in refunds affected many of his clients.

Though tax audits were done and documents were in order, they often had to wait long before getting their refunds, he said.

He said the government’s move to allow companies to offset their refunds against the tax payable for the year was a good idea.

SME Association of Malaysia president Datuk Michael Kang said the group received many complaints from members on the issue.

He pointed out that businesses needed to pay estimated annual income tax before the end of a business year.

Businesses, he said, were penalised if their estimates were lower than the actual amount.

“But many of them had problems getting refunds if they paid the extra taxes,” he said.

Inspector-General of Police Tan Sri Mohamad Fuzi Harun said police were investigating the case as criminal breach of trust.

“We already received the relevant reports. Our probe will explore all angles,” he said.

Fuzi said police would call up anyone connected with the case, when asked whether former Treasury secretary-general Tan Sri Dr Mohd Irwan Serigar would be questioned.

“Rest assured that we will get to the bottom of the matter,” he said.

In a statement, Dr Mohd Irwan said all parties and officers in the Cash Flow Committee should be consulted on the matter.

“They know the truth and financial operating procedure we had to abide in managing the country’s financial position,” he said.