Najib, son has to pay tax arrears of RM1.7 billion
October 16, 2023 13:41 MYTH
Najib, son has to pay tax arrears of RM1.7 billion
Najib and Mohd Nazifuddin need to repay more than RM1.7 billion in tax arrears for the years 2011 and 2017 to the IRB. - Image file
PUTRAJAYA: Datuk Seri Najib Tun Razak and his son, Datuk Mohd Nazifuddin have to repay more than RM1.7 billion in tax arrears, for the years 2011 to 2017, to the Inland Revenue Board (IRB).
The decision was obtained after five panels of the Federal Court on Monday, led by Tan Sri Abang Iskandar Abang Hashim, unanimously rejected the appeal of the former Prime Minister and Nazifuddin against the judgment directly obtained by the LHDN to obtain the value of the tax.
Also sitting were Judges, Datuk Mohamad Zabidin Mohd Diah, Tan Sri Nallini Pathmanathan, Datuk Mary Lim Thiam Suan and Datuk Abu Bakar Jais.
When reading the judgment, Nallini said, Section 106 of the Income Tax Act 1967 provides for statutory debt, it must be paid for the purpose of obtaining the debt only.
According to him, the section is also constitutional and does not encroach on judicial power or violate Article 5(1) of the Federal Constitution in terms of the right to a fair trial.
"The appellant states that Section 106(3) of the same act puts them in a position that is not equal to the respondent.
"The appellant is of the opinion that the section gives broad powers to the opposite party, in relation to tax matters, thereby causing a violation of Najib's right to receive equal treatment," he said.
The judge said, the court found, there was no violation of Article 8 of the Federal Constitution because the passing tax statute must comply with the classification.
According to him, the task of taxing is a sovereign function of the government, so it cannot be considered a private function.
He said, the respondent levied taxes on Najib and his son, as applied to all citizens.
Therefore, he said, the arguments of the defense for UMNO leaders and Nazifuddin regarding the alleged violation of Article 8 are baseless.
He said that the Income Tax Act was implemented to ensure that tax collection was done efficiently for the benefit of the people as a whole and that even Section 106(3) of the act had a rational relationship with sustainable tax collection.
He said, the power of constitutional review contained in Article 4(1) of the Federal Constitution is an instrument that should be used by the Judiciary with caution.
He said, if it is applied indiscriminately, it will cause great damage.
"In this appeal, the authority is able to affect the national tax collection system, and affect the functioning of the government and the people.
"Therefore, the appeals of the two appellants were dismissed with no order as to costs," he said.
In this case, the lawyer, Tan Sri Muhammad Shafee Abdullah appeared to represent Najib and Nazifuddin while the Chief Solicitor for the Revenue, Dr Hazlina Hussain on behalf of the LHDN as the respondent.
However, the former Pekan Member of Parliament and his son were not present during the proceedings.
Najib and Nazifuddin appealed, after two Kuala Lumpur High Courts in 2020 allowed the IRB's application to enter a direct judgment to recover their respective tax arrears of RM1.69 billion and RM37.6 million.
Direct judgment is when the court decides a particular case through arguments without hearing the testimony of witnesses in the trial.
The two failed in their appeal at the Court of Appeal on 9 September 2021 to set aside the direct judgement.
On May 10, 2022, they obtained permission to proceed with the appeal to the Federal Court. Najib and Nazifuddin's appeal was decided by the Federal Court based on nine legal questions.
On 25 June 2019, the government through the IRB filed a suit against Najib, demanding that the political leader pay the amount in question for unpaid income tax, an interest rate of five percent per annum from the date of judgment, costs and other relief deemed appropriate by the court.
The IRB, through the Malaysian government, has also filed a writ of summons against Nazifuddin on 24 July 2019, claiming that Najib's son has not paid tax for the assessment year for seven years starting from 2011, as stated through an assessment notice dated 15 March 2019.
Najib and Nazifuddin also received a bankruptcy notice from the IRB for failing to pay income tax as decided by the High Court.
