AG Report: Technical errors behind Customs Department failure to collect RM15m

PETALING JAYA: The Auditor General (AG) thumbed down the Customs Department as technical errors in completely built up (CBU) vehicles assessment left almost RM15 million in taxes uncollected.
The AG Report 2014 series 3 found that the Malaysian Association of Malay Vehicle Importers and Traders (Pekema) did not apply for time extension to keep their unsold imported vehicles more than 36 months without being taxed.
"As at Dec 31, 2014, estimated duty from those unsold imported vehicles amounted to RM12.65 million," the Report said of the bulk of the amount.
Furthermore, 213 K1 forms from an audit sample of 3,931 forms contain errors that resulted in under-collection of taxes amounting to RM1.29 million.
However, the same mistakes have also led to an over-collection of RM499,296.
The Report also noted that seven audited licensed warehouses with 725 vehicles in total with an estimated duty of RM38.22 million were uninsured for fire and theft.
The Customs' monitoring of vehicles from/to Designated Area was also unsatisfactory due to the lack of comprehensive and immediate measures to penalize offenders who, for example, forfeit bank guarantees.
The AG recommended that the Customs' Warehouse Management and Control Unit step up enforcement over unpaid/tax vehicles in licensed warehouses.
It was also recommended that only quality Custom Declaration forms with sufficient details on vehicle information and registration date be accepted by officers.