The Future Of Tax Appeals – Are Taxpayers’ Rights Being Protected?

In the 2020 Budget Speech, Finance Minister, Lim Guan Eng, announced the plan to merge the Special Commissioners of Income Tax (“SCIT”) and the Customs Appeal Tribunal (“CAT”) into the Tax Appeal Tribunal (“TAT”). This is being done with the aim to “improve efficiency of taxpayer appeals” and is targeted to come into effect in 2021. 


At a time when a record number of appeals are being filed against the tax authorities, this proposal warrants serious consideration. Taxpayers are increasingly facing mammoth tax assessments from ever more aggressive tax authorities. The Courts are the last bastion to protect the rights of taxpayers. 

Currently, there are 2 issues plaguing taxpayers:

  1. It takes an incredibly long time for an appeal to be heard by the SCIT. Currently, it takes 3 years or more from the filing of an appeal to get a hearing date before the SCIT. Appeals before the CAT, however, are resolved more quickly. 
  1. For income tax, whilst the law does not expressly provide that a taxpayer must pay the tax demanded first before getting a hearing date before the SCIT, it is the Revenue’s view that the taxes demanded must be paid first whether or not an appeal has been filed and a penalty will be imposed if such sum is not paid within 30 days. The Revenue also initiates civil recovery action against taxpayers who do not pay the taxes demanded. For appeals before the CAT (which would cover taxes like import duty, export duty, sales tax, service tax and excise duty), the law does not allow an appeal to be heard until the taxes demanded are paid by the taxpayer. 

All of this leaves taxpayers with a large bill of taxes to be paid without a speedy resolution of the dispute with the tax authorities. This has led taxpayers to seek alternative remedies such as filing an application for judicial review at the High Court, which is quicker and offers more remedies to taxpayers. However, the Courts are reluctant to allow judicial review proceedings since an alternative remedy under the law exists. The Courts will usually only allow judicial review in exceptional circumstances.

Whilst the proposal for the merger is supposed to be aimed at increasing efficiency, it is likely not to have the impact desired. 

Instead of speeding up the resolution of tax appeals, now Customs cases may end up being slowed down. This is unless the new TAT is given additional and adequate resources to deal with the workload.

The proposal also does not solve the issue of payment of taxes. Taxpayers will still have to pay the taxes first and wait for their appeals to be heard. In this regard, the TAT should at the very least be given the power to grant a stay against payment of taxes in exceptional cases.

Until these issues are resolved, taxpayers will keep going to the High Court for judicial review instead of going to the tax tribunals.

Contributed by: 

Vijey M. Krishnan (Partner) 
(T): 603 – 2632 9868

William Wong (Senior Associate)
(T): 603 – 2632 9905

Nicholas Mark Pereira (Senior Associate)
(T): 603 – 2632 9911     

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