Over 5,000 traders facing GST probe

PETALING JAYA: The Customs Department has a policy of friendliness, but that does not mean it will close an eye on errant traders.

At least 5,000 nationwide face possible action for offences related to the Goods and Services Tax (GST), fraud and non-submission of tax returns.

Deputy director-general (enforcement and compliance) Datuk Subromaniam Tholasy said that 7,638 investigation papers were opened between April 1, 2015 and Dec 31, last year.

Out of those cases, 5,165 were still being investigated. Some 873 cases were closed or marked for no further action.

Subromaniam said there were 593 cases pending hearing while the courts had decided in 181 cases.

He said the top four offences being investigated were non-submission of tax returns, fraud, failure to pay GST and under-declaring GST.

Realising this, the department, through its Customs Blue Ocean Strategy, changed its game plan – using a friendly approach to get businesses to comply with GST regulations.

The new informed compliance initiative saw a few thousand Customs officers paying friendly visits to traders, to explain and help them comply with GST regulations.

Subromaniam also urged traders to come forward on a voluntary basis, adding that they should not wait “until they are caught.”

From September to December last year, Customs officers visited more than 20,000 GST-registered businesses.

“We found that at least one third of these businesses did not pay GST or had under-declared,” he said.

Those found guilty of flouting the regulations can be fined up to 40% of the total value, on top of coughing up the balance of the under-declared tax, Subromaniam said.

Subromaniam said Customs officers aimed to visit at least 200,000 of the 431,000 businesses that were registered with it. The department hopes to collect RM3bil through the exercise.

“We will audit, not a full scale one, but we would like to see if the declaration is done correctly and we will instruct the traders to do it the right way. We will give them two weeks to comply.

“If they fail to do so, then we will go ahead with enforcement action,” he said.

He stressed that Customs does not want to punish businesses as some genuinely did not understand the GST process.

“Some are doing it the wrong way because they are unsure of the process.

“So we want to give them more time instead of dragging them to court.

“With this informed compliance, the Government gets (to recoup) the revenue and the traders are spared from further action.”