Former Prime Minister Najib Razak, currently serving 12 years in prison for looting the state investment fund 1MDB, owes the Inland Revenue Board (IRB) a whopping RM1.7 billion in tax arrears. And the crook wants to evade paying the tax even after having stolen billions of taxpayers’ money. His top lawyer now argues that there was a problem with the law, which says the court shall not entertain any plea.
Shafee Abdullah, the defence lead attorney whom Mr Najib had previously praised as his “hotshot lawyer”, has attacked Section 106(3) of the Income Tax Act 1967 as problematic and has denied his client a fair trial. The section does not allow the court to entertain appeals that the amount sought by the IRB is excessive, incorrectly assessed, under appeal or incorrectly increased.
The provision of the law, however, has been in existence for 50 years. So why hadn’t Najib raised any concerns over the unfair law when he was walking the corridors of power – until he is now punished for tax evasion? The best part is it was Najib who said in 2013 that tax evaders were traitors. He said – “When we pay taxes, we are helping the people. We instil this spirit – with this our country will be more successful”.
It’s both pathetic and laughable when the ex-premier saw it fit to condemn the Income Tax Act only when he’s on the receiving end, when the same taxation system was previously praised as brilliant and fair for helping the country and people. Naturally, the 5-member Court of Appeal was not impressed with defence lawyer Shafee’s half-baked arguments.
Justice Nallini Pathmanathan lectured Najib’s legal eagles that the country needed to collect tax. Grilling Shafee, she said – “There are many poor people who rely on taxes as a means of income redistribution from the wealthy. Have we looked at it from the view of the country, instead of looking at it from the viewpoint of the taxpayer who says his rights have been impinged?”
Federal Court judge Nallini insisted that Najib must pay the amount due first regardless of any appeal. She said – “The rationale behind this principle is to treat taxpayers equally, vis a vis, between compliant and non-compliant taxpayers, and most importantly, to protect the Government’s coffers”. Led by Abang Iskandar Abang Hashim, the Court of Appeal included Mohamad Zabidin Mohd Diah, Mary Lim Thiam Suan and Abu Bakar Jais.
The IRB first filed a lawsuit on June 25, 2019, demanding Najib pays RM1,692,872,924.83 owed between 2011 and 2017. The lawsuit was initiated by now-collapsed Pakatan Harapan government after Najib – stubbornly and arrogantly – ignored the IRB’s initial demand in March 2019 for additional tax assessments of RM1.47 billion (approximately RM1,465,690,844).
Apparently, the Inland Revenue Board slapped crooked Najib with a tax bill for an extra RM1.47 billion of undeclared taxable income of close to RM4 billion between 2011 and 2017, including the RM2.6 billion (US$681 million) “donation” that he has consistently claimed was from Saudi Arabia royal family, a claim that could not be fully substantiated.
Najib’s failure to respond to an initial inquiry by the IRB saw a 10% hike of RM147 million (RM146,569,084.39) in April 2019 and another compounded 5% hike of RM80 million (RM80,612,996.39) in May 2019, bringing the total of tax owed to RM1.69 billion. The penalty was in line with Section 103 of the Income Tax Act 1967 after Najib had failed to pay within 30 days.
The former prime minister thought he could get away with supporting the “Sheraton Move” – a political coup that saw traitors Muhyiddin Yassin and Azmin Ali plotting with Opposition UMNO Malays nationalist and PAS Islamist party to topple their own government, leading to the collapse of legitimate and democratically elected Pakatan Harapan government.
Obviously, Najib failed to get off the hook. On February 28, 2020, just days before Muhyiddin was sworn in as the 8th Prime Minister of Malaysia on March 1, 2020, High Court judge Ahmad Bache denied Najib’s application to obtain a stay over the RM1.69 billion tax lawsuit. Power-crazy Muhyiddin saw his former boss, Najib, as a personal threat, hence refused to help him.
On July 22, 2020, Judge Ahmad Bache agreed with the taxman, granting a summary judgment for Najib to pay the RM1.69 billion. Ordering Najib to pay, the judge said – “The principle of revenue law says that when there is a debt due to the government, the court shall not entertain any plea whatsoever.” Ahmad Bache’s judgement in 2020 is the same delivered by Nallini Pathmanathan yesterday.
Defending the penalty as fair and must be seen as fair to everyone, Judge Bache said in 2020 – “If all other taxpayers are to be imposed with such penalties upon late payment of taxes due, it is only fair that the defendant, who is a former finance minister and former prime minister, be subjected to the same provision of penalty as everyone stands equal before the law.”
The High Court judge had also advised Najib to dispute the amount of assessment with the SCIT (Special Commissioners of Income Tax) by filing an appeal. But the SCIT is an independent tribunal which consists of panel members appointed by the Yang Di-Pertuan Agong (King) to handle tax appeals. Therefore, the SCIT is no ordinary commission that Najib could intimidate.
Actually, Najib’s defence lawyers had already filed an appeal with SCIT. The problem is Najib must still pay the tax and penalty before he can appeal against an assessment under section 99 of the Income Tax Act 1967. The Section 103(1) of the Income Tax Act basically says “pay first, talk later” – regardless whether you want to appeal or negotiate.
Furious and mad over Judge Ahmad Bache’s judgement on July 2020, Najib immediately went ballistic and took to his Facebook account to express his displeasure. He claimed the lawsuit was an act of oppression espoused by the Pakatan Harapan government against him, despite the fact his party UMNO was already part of the backdoor Perikatan Nasional government led by Muhyiddin.
On February 4, 2021, the Inland Revenue Board finally moved to the next stage, filing a bankruptcy notice against Najib Razak for failing to pay RM1.69 billion in taxes owed. Subsequently, on May 31, Najib’s lawyers applied to strike out the notice. By then, the tax amount had snowballed to RM1.74 billion (approximately RM1,738,804,204.16), thanks to 5% annual interest rate.
Like a broken record, Mr Najib also claimed that it was part of a conspiracy to destroy his political career. On June 14, 2021, the same High Court Judge Ahmad Bache again dismissed Najib’s application to temporarily suspend the 2020 court order for him to pay RM1.69 billion in taxes and late payment penalties. The judge said there cannot be “special circumstances” for Najib.
Yesterday, Head of Revenue Solicitor Dr Hazlina Hussain testified in the Court of Appeal that generally the taxation scheme of every tax administration in the world demands that taxpayers pay the tax due and payable regardless of any appeal. She said – “If this appeal is allowed by the court, public interest shall be prejudiced as a whole and this appeal is filed by the appellants to evade the tax that is due and payable in the first place”.
The biggest problem is Najib does not possess all the necessary documents to substantiate his dubious claims of Saudi donations. To make matters worse, his arguments were full of contradictions.. First, he said political contributions are not taxable. Then, he said incomes obtained from abroad are not taxable. So, were the money just donations or incomes from abroad, neither which he can prove?
Crooked Najib had done worse when he abused his power to target his political enemies. For example, Lee Kim Yew, the founder and chairman of Country Heights Holdings Bhd (CHHB), revealed how his personal fixed deposits of about RM126 million placed in a foreign-owned bank was seized by the IRB, all because the tycoon was a loyal friend of Mahathir, mentor-turned-nemesis of Najib.
Even after the boss of Country Heights was forced to pay RM22.7 million, including penalties to the IRB, Najib was not satisfied. To humiliate Lee Kim Yew for supporting Mahathir’s campaign against Najib administration, the IRB was also instructed to charge billionaire Lee under AMLA (Anti Money Laundering Act) for trying to launder his “legitimate” money.
Of course, in reality, Najib can easily pay off the tax owed, thanks to tens of billions of dollars stashed overseas as a result of decades of corruption. However, if he pays, it will show he’s indeed a multi-billionaire as suspected, and could invite more investigations and charges for tax evasion – or even corruption. But if he doesn’t pay, he will be declared bankrupt and his political career would be over.
Source : Finance Twitter