KK company, directors fined RM48,000 for service tax non-payment

KOTA KINABALU (March 10): The Sessions Court here has fined a food and beverage company and its two directors a total of RM48,000 for failing to pay service tax amounting to RM2,178,939.69.

Judge Hurman Hussain imposed the fines following guilty pleas by ZBN Group Holdings Sdn Bhd and its directors Zulnizar Norsinin, 40, and his mother Rubiah Ahmad, 64, to a total of 16 charges each under Section 26(8) of the Service Tax Act 2018.

The Section provides for a fine not exceeding RM50,000 or imprisonment for up to three years, or both, upon conviction.

The court imposed a fine of RM1,000 in default 14 days’ jail for each charge, and also ordered for the outstanding service tax amount to be paid in instalments within 24 months in default 12 months’ jail.

According to the charges, the accused failed to pay the service tax from 2019 until 2022.

The total amount of service tax owed was RM2,908,548.81, of which RM729,609.12 had already been paid.

In mitigation, Zulnizar and Rubiah pleaded for a lower fine, stating that their company had been dormant since 2022 and that sales had been severely affected during the Covid-19 pandemic and post-pandemic period.

The prosecution, however, urged the court to impose a deterrent sentence in view of the seriousness of the offence.

Hurman had earlier ordered for the outstanding amount to be settled within nine months, but agreed to extend the period to 24 months following an appeal by Zulnizar.

Zulnizar had initially sought for 36 months but his request was rejected.

“I cannot give 36 months. You have 24 months to settle via instalments in default 12 months’ jail,” said Hurman.

Customs Department prosecuting officer Azizah Talibe prosecuted the case, while the company, Zulnizar, and his mother were unrepresented by counsel.

The two accused have settled the court-imposed fines.