Sin Chew Daily

Some of the participants of the special voluntary disclosure program (SVDP) have lately received letters from the LHDN, and this shows that the authorities are going to audit the disclosures by taxpayers "in good faith"? Once the news broke out, people began to get alarmed.

The SVDP was introduced by the then Pakatan Harapan government to be implemented between November 3, 2018 and September 30, 2019 for taxpayers who had negligently omitted some of their taxable incomes to make amends and enjoy lighter fines. Some 286,428 taxpayers took part in this program, 11,176 of whom first-time taxpayers, resulting in an additional collection of RM7.88 billion on the part of LHDN.

These "honest" taxpayers thought they would now get the opportunity to make up for their past tax omissions while discharging their duties as responsible tax-paying citizens.

Unfortunately the government now maneuvers a massive U-turn by not honoring its earlier pledge of not auditing voluntary disclosures.

Such a move from LHDN has triggered tremendous backlash from the public who accuse the authorities of messing up a supposedly win-win solution for both the government and the general public.

Former finance minister Lim Guan Eng who engineered this initiative says he is willing to become the witness for taxpayers hauled to the court because of this policy reversal.

Responding to the public outcry, the LHDN issued a statement on Tuesday, arguing that the authorities reserve the right to conduct audits and investigations on suspected non-compliance of the 2019 operational guidelines (GPO) under the SVDP.

The statement said although LHDN had promised to accept the disclosures by SVDP participants in good faith, taxpayers must still abide by all the stipulated guidelines.

The 2019 GPO only mentioned that the LHDN will "examine" the particulars declared by taxpayers, but never makes mention of "further investigations on taxpayers", and these two are very different things altogether.

Perhaps some may argue that if a taxpayer did declare honestly, then he or she would have nothing to fear now.

Even though the taxpayers may have honestly declared all their incomes, that does not mean they have all the particulars and evidences complete, and very often the amounts declared are just estimates. If all these items have to be reexamined, the taxpayers may not only have to waste time collecting new data but may also find themselves slapped with heavy fines for such unintended oversight.

We believe most taxpayers were indeed declaring their incomes faithfully back then, and this reflects a high level of moral integrity on their part as well as their willingness to take the risk of "throwing themselves into the trap set up by the government".

LHDN should do more to allays the fears and doubts of the public whether all SVDP participants will each "get their letters", and under what circumstances they will get their "show cause" letters. LHDN must also elaborate whether such letters are issued at random or to specifically targeted taxpayers, the percentage of taxpayers to be investigated and when the investigation will start and end.

Last but not least, it is hoped that the government and LHDN will spare some thoughts for the people during such a trying time, knowing that many are struggling to make ends meet. Don't send out any letter just to frighten the honest taxpayers and unnecessarily add to their mental stress, as this will only backfire and make them lose faith in the government's policies.