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Media Statement (2)      
by Lim Kit Siang  
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(Petaling Jaya, Sunday) : The Prime Minister, Datuk Seri Abdullah Ahmad Badawi, in his capacity  as Finance  Minister should direct the Inland Revenue Board to stop invoking Income Tax Act Section 104 barring Malaysians from leaving the country for failing to pay income tax  for business, tours and holidays when they have every intention of returning and not absconding from the  country, and to seek the advice of the Attorney-General.

In her interview with New Sunday Times, the Chief Executive Officer and Director-General of Inland Revenue Board, Hasmah Abdullah advised 39,867 people who had been blacklisted as tax defaulters that they are barred from leaving the country for failing to pay income tax.

Holiday-makers who bought tickets at the recent Matta fair to go overseas are advised to visit the Inland Revenue Board before they board the plane.

This is most ludicrous and smacks of harassment and even blackmail – something which should not be associated with the public service.

Hasmah pointed out that under  Section 104 of Income Tax 1967, individuals – locals or foreigners – would not be allowed to leave the country if they had not settled their income tax.

I believe that when Parliament passed  Section 104 of  Income Tax Act 1967 forty years ago, the intention was to prevent individuals, whether locals or foreigners, from evading income tax by absconding from the country – rather than to restrict their business or spoil their holidays plan.

I do not believe Parliament ever intended  to prevent  Malaysians with income tax problems  from going to Singapore, Thailand or other overseas country whether for holidays or business.

I would therefore contend  that  Section 104 should only used to bar an income tax defaulter from leaving the country if he is  likely to abscond to another country to evade payment –  and not to be used all and sundry against  everyone of the 39,863 defaulters who want to go overseas for holidays, tours or business with every intention of returning.

The Attorney-General should be asked to advise the Cabinet whether Section 104 should  be given such a  restricted meaning by the Income Tax Board, as 40 years after the enactment of the Income Tax Act in 1967, overseas travel have become commonplace  especially in the era of globalization and the advent of budget airlines  that there should be no unnecessary restrictions for freedom of travel, except in the specific case where the Income Tax Board have reason to believe that a defaulter is likely to abscond abroad to evade tax payment.

(25/3/2007)