Samenta president William Ng said SMEs should not have to “fight” two different government agencies using two different sets of lawyers for the same business period.

He said the tribunal should also be empowered to make final and binding decisions on both taxpayers and the Inland Revenue Board or customs department for disputes involving sums below RM100,000.

“SMEs cannot afford years of wars of attrition in the High Courts. By making the tribunal’s decision binding for smaller sums, we provide SMEs with finality and prevent the government from using its vast resources to outspend SME owners in court,” he said in a statement today.

Ng was commenting on remarks by Bagan MP and former finance minister Lim Guan Eng in the Dewan Rakyat last Wednesday, repeating his proposal for a tax tribunal amid reports of more aggressive tax audits following the roll-out of e-invoicing and stricter compliance measures.

Ng also criticised the “pay first, dispute later” policy under Section 103 of the Income Tax Act 1967, saying the legal “relic” had seen SMEs forced into “tax-induced bankruptcies” because their working capital was seized for assessments that were later proven incorrect.

According to Section 103, tax payable for a year of assessment “shall be due and payable on the due date, whether or not that person appeals against the assessment”.

He proposed that penalties or the collection of additional taxes be automatically suspended once a notice of appeal is filed with the tribunal, provided it is done within 30 days.

Ng also said the tribunal should present its arguments in plain language instead of “legal jargon that disadvantages” SMEs, who cannot afford tax agents or lawyers.

“The tribunal must be a forum of fact, not a forum of technicalities,” he said.

Ng said SMEs deserved a fair chance to challenge assessments they believed were unjust, and urged the government to involve industry players in designing the proposed tribunal.