Kota Kinabalu: A company and its two directors were fined a total of RM48,000 for failing to pay service taxes, including penalties amounting to RM2,178,939.69, to the Royal Malaysian Customs Department between 2019 and 2022.
Sessions Court Judge Hurman Hussain meted out the sentence to ZBN Group Holdings Sdn Bhd, Zulnizar Norsinin, 41, and Rubiah Ahmad, 62, after they pleaded guilty to 16 charges each on Tuesday.
The court ordered each of the accused to pay RM1,000 in fines or serve 14 days in jail for each charge. As each faced 16 charges, they were required to pay RM16,000 each in fines.
The charges stated that the company and its directors failed to make the service tax payments within the prescribed period between March 2019 and December 2022.
The offence under Section 26(4) of the Service Tax Act 2018, punishable under Section 26(8) of the same Act, provides for a jail term of up to three years, or a fine of up to RM50,000, or both, upon conviction.
The court also ordered the company and its directors to pay the outstanding taxes within 24 months, failing which they would face 12 months’ imprisonment each.
According to the facts of the case, they had submitted the Sales and Service Tax (SST-02) returns to the Royal Malaysian Customs Department within the prescribed period but failed to make the required payments. They also failed to pay the penalties for late payment.
In mitigation, Zulnizar, who also represented the company and his mother, asked for the lowest possible fine to be imposed, saying their business was not doing well and had become dormant since 2022 due to poor sales.
He told the court that the delay in paying the service taxes was due to the Covid-19 pandemic, which affected the cash flow of their business.
He also asked for an extension of time to settle the outstanding taxes within 36 months.
Rubiah also requested a lower fine, claiming that their business had not generated much income.
However, Customs Prosecuting Officer Azizah Talibe urged the court to impose a deterrent sentence, describing it as a serious offence that could affect the country’s economy, as the company had collected about RM2.1 million from customers but failed to pay the taxes.
Azizah later told the media that the total unpaid taxes previously amounted to RM2,908,548.81, but the accused had since paid RM729,609.12.
They paid the fines.
