2 Expats Told To Pay RM1.59 Million In Income Tax After KL Mini Market Owner Faked Salaries

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Two Chinese nationals working in Malaysia are facing tax bills of RM748,073.84 and RM842,118.84 after their employer allegedly submitted false salary information to the Inland Revenue Board (LHDN)

Li Juan, 42, discovered the issue while attempting to extend her work permit, while Chen Bi Ling, 40, who is married to a Malaysian, found out during her spouse's visa renewal, according to The Star.

Speaking at a press conference at Wisma MCA earlier this week, MCA Public Services and Complaints Department head Datuk Seri Michael Chong said both women worked for the same employer in Kuchai Lama, Kuala Lumpur.

Li worked as a sales and marketing manager, while Chen was a part-time cashier.

"The employees were working under an employer named Mr Yu, 43, who is also a Chinese national," Chong said.

"He also owns several mini markets and a steamboat restaurant. The employer misused the two victims' identities and passports to file tax returns with the LHDN."

The alleged scheme involved reporting inflated salaries to LHDN

"He reportedly declared that the workers earned close to RM1 million annually, far above their actual salaries of RM7,000 to RM10,000. This could allow the company to report lower profits and reduce its tax liability," Chong said, describing it as a clear case of tax fraud.

James Ee Kah Fuk, president of the Malaysia-China Friendship and Mutual Aid Association (MCFAMAA), said the employer was evading taxes while committing fraud against the employees.

"Every company is required to declare its employees' income to LHDN and make the necessary tax deductions accordingly, but he is running away from this responsibility," Ee said.

"There are also a couple of other staff members facing similar issues in that company."

Datuk Goh Boon Keng, a retired deputy police commissioner in Perak and MCFAMAA deputy president, confirmed investigations are ongoing.

He advised foreign workers to ensure proper documentation, including formal offer letters and payslips.

Foreign workers are being urged to take extra precautions to avoid falling victim to tax fraud

It is recommended to always secure a formal offer letter and ensure that payslips and salary details are properly documented. Even if an employer is handling tax paperwork, employees should file their own income tax returns to stay protected.

Relying solely on social media or informal messaging for employment details can leave workers vulnerable to exploitation, as seen in this case.