KUALA LUMPUR: Two Chinese nationals working in Malaysia are facing income tax bills amounting to RM748,073.84 and RM842,118.84, respectively, after their employer allegedly used their identities to submit false salary information to the Inland Revenue Board (LHDN).
Li Juan, 42, discovered the issue when she tried to extend her work permit, while the other victim, Chen Bi Ling, 40, who was married to a Malaysian, found out about it when she was extending her spouse's visa.
Speaking at a press conference at Wisma MCA, MCA Public Services and Complaints Department head Datuk Seri Michael Chong said Li was a sales and marketing manager, while Chen was a part-time cashier, and both were facing the same problem involving the same employer.
“The employees were working in Kuchai Lama under an employer named Mr Yu, 43, who is also a Chinese national,” he said on Monday (Jan 19).
“He also owns several mini markets and a steamboat restaurant.
“The employer misused the two victims’ identities and passports to file tax returns with the LHDN,” Chong said.
Chong said the employer’s alleged modus operandi was to inflate employees’ salaries when filing tax returns with the LHDN.
“He (Mr Yu) reportedly declared that the workers earned close to RM1mil annually, which is far above their actual salaries of RM7,000 to RM10,000.
“This could allow the company to report lower profits and reduce its tax liability,” he said, adding that this is a fraud case in which the employer is trying to cheat the government.
Chong added that such cases have been occurring frequently in the country, and some have even been referred to MCA by the Embassy of the People’s Republic of China in Malaysia.
“We really hope that the authorities can look into this matter.
“Present at the press conference was Malaysia-China Friendship and Mutual Aid Association (MCFAMAA) president James Ee Kah Fuk, who also said that the employer is trying to evade heavy tax deductions and is committing such fraudulent acts against the employees.
“Every company is required to declare its employees’ income to the LHDN and make the necessary tax deductions accordingly, but he is running away from this responsibility as his business could be earning high profits,” he said.
“There are also a couple of other staff members who are facing a similar issue in that company,” Ee said.
Meanwhile, MCFAMAA deputy president Datuk Goh Boon Keng said investigations into the matter are still ongoing.
“We advise anyone coming to Malaysia for work to go through proper channels, including obtaining a formal letter of offer and payslips, and to pay tax.
“These two victims were involved in this case because they did not receive proper documents, and their employment details were only communicated through a social media messaging platform.
“Since they had never filed their own income tax, there was a potential risk of fraud that employers could exploit,” said Datuk Goh, who is also a retired deputy commissioner of police in Perak.
