As reported by the Edge Financial Daily, Mr. Najib had apparently undeclared taxable income of close to RM4 billion between 2011 and 2017, including the RM2.6 billion (US$681 million) “donation” that he has claimed was a donation received from the royal family of Saudi Arabia. This means Najib had not only evaded taxes, but also the only billionaire prime minister of the country.
Although donations are tax deductible for people who wish to donate to charitable house, such donations must be made to approve institutions. You cannot simply donate to your friend and claim for tax deductions. In the case of Najib, he has insisted that some royal members of the Kingdom of Saudi Arabia had donated to him. Clearly, the name “Najib Razak” is not an approved institution.
Even then, you must present or have in your possession valid proof when you claim your tax deductibles. But in the case of Najib, he did not have the full collection of receipts to prove that the RM2.6 billion, let alone the almost RM4 billion he received between 2011 and 2017, were donations. Heck, he did not even bother to declare his so-called “donations” at all.
One can only imagine how dirty money can be easily legitimized if everyone start donating to each other to evade taxes. The Edge also quoted tax experts as saying that donations are subject to income tax. Therefore, Najib has committed an offence by not declaring the RM2.6 billion as his income, regardless of the source.
According to Inland Revenue Board (IRB), you can be audited for up to 5 years of assessment, and there is no time limit on the audit if there is fraud or tax evasion, so the immediate problem facing Najib is with the income tax department. According to the Income Tax Act of 1967, tax evaders could face fines of RM1,000 to RM20,000 or imprisonment or both, and 300% of tax undercharged.
Source : Finance Twitter
It Would Take Him 1,766 Years To Pay RM1.69 Billion In Taxes
From May 2009 to April 2018, Najib Razak earned RM58,605.15 every month as the 6th Prime Minister of Malaysia. Prior to that, he took home RM48,681.65 as the country’s 9th deputy prime minister. On top of that, his monthly allowances were RM3,846.59 as PM and RM6,508.59 as MP (2011 to 2014). The allowances were later raised to RM19,846.59 (2015 to 2018).
n other words, Najib’s total salary from Parliament and his government positions entitled him a whopping RM78,451.74 – every month – before he stepped down after his humiliating defeat in the 14th General Election in May 2018. To make calculations easier, let’s assume he had been earning the monthly RM78,000 since 1976, the year he was elected to the Parliament replacing his deceased father.
And let’s assume Najib did not spend any of the money he earned in the last 42 years (from 1976 to 2018). Assuming also he did not put his money to work at all, his bank account would have RM39 million. Still, Mr. Najib will owe a whopping RM1,653,560,924 (that’s over RM1.65 billion, mind you) of unpaid income tax to the Inland Revenue Board (IRB).
Even if he could strike a deal with the taxmen to pay by installment of RM78,000 every month, income which he no longer earns, it would take him 21,199 months to settle his taxes. That’s about 1,766 years to pay the RM1.65 billion taxes. Even if a 90% discount is given, which is impossible, Najib needs to live another 176 years to settle his taxes.
Apparently, the Inland Revenue Board (IRB) or LHDN (Lembaga Hasil Dalam Negeri) filed the suit on June 25, demanding Najib pay RM1,692,872,924.83 allegedly owed between 2011 and 2017. The lawsuit was initiated after Najib – stubbornly and arrogantly – ignored the IRB’s initial demand in March this year for additional tax assessments of RM1.47 billion.
Back in March, Mr. Najib reportedly had undeclared taxable income of close to RM4 billion between 2011 and 2017, including the infamous RM2.6 billion (US$681 million) that he has claimed was a donation received from the royal family of Saudi Arabia. That means Najib had not only evaded taxes, but also the only billionaire prime minister of the country.
As a result of his deliberate attempt to challenge the IRB, the initial RM1.47 billion of unpaid tax saw a 10% hike of RM147 million in April and another compounded 5% hike of RM80 million in May. Under Section 103 of the Income Tax Act, the former Malaysian leader must pay the initial RM1.47 billion within 30 days of the date the assessment notice was issued.
Section 103(1) says that any tax due should be paid on time “whether or not” you are appealing against the tax calculations (if there is a dispute). Section 103(3) goes on to say that the unpaid amount on the due date will be charged an extra 10%. On top of that, if that increased tax is not settled within 60 days, you’ll be slapped another 5% according to Section 103(4).
Muhammad Farhan Muhammad Shafee, Najib’s lawyer and the son of hotshot attorney Shafee Abdullah, said the case of “pay now and talk later” would adversely impact his client. He told reporters – “The amount to the tune of RM1.69 billion will effectively bankrupt my client and disqualify him as an MP (Member of Parliament).”
Najib’s attorney was also upset that the IRB’s lawyers have indicated that they would proceed to file an application for a summary judgment, even though the former premier was contesting the matter in court. Farhan said he would be filing for a stay of proceedings pending resolution of the assessment – “They are doing this even though there is an appeal on the tax assessment.”
As the son of the so-called hotshot lawyer Shafee, which part of Section 103(1) of the Income Tax Act that attorney Farhan doesn’t understand? It says that any tax due should be paid on time, whether or not you are appealing against the tax calculations – hence pay first, talk later. Of course, if Najib has trouble paying off that tax on time, he can always request to pay by installment under Section 107B.
In actual fact, as the former prime minister, Najib should be the last person crying, whining and bitching about being victimised by the tax men. During his regime, friends and those thought to be connected to then-opposition leader Mahathir Mohamad was being harassed by the previous Barisan Nasional government – including the misuse of the IRB to intimidate businessmen still loyal to Mahathir.
Source : Finance Twitter
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