Court orders Najib to pay IRB RM1.69b first, talk later

by RAHIMI YUNUS/ pic by ARIF KARTONO

THE Kuala Lumpur High Court ordered former Prime Minister (PM) Datuk Seri Mohd Najib Razak (picture) to pay RM1.69 billion in additional income tax, including penalties, for the period between 2011 and 2017.

Judge Datuk Ahmad Bache allowed the Inland Revenue Board’s (IRB) application of summary judgement to recover the additional income tax due including penalties against Najib, who failed to demonstrate that there are triable issues.

A summary judgment is a mechanism that can shorten the time and completion of civil litigation that normally goes through multiple stages from pleading, pre-trial discovery, trial and judgment, appeal and enforcement stages.

In a 37-page written judgement, Ahmad said the imposition of penalty on the defendant by the plaintiff is permissible and fair, similar to how other taxpayers are to be imposed upon late tax payments.

“… it is only fair that the defendant, who is a former finance minister and former PM, be subjected to the same provision of penalty as everyone stands equal before the law,” the judge decreed yesterday.

Previously, Najib in his defence submission pleaded that the assessments by IRB were grossly incorrect and without basis for many reasons, mainly on grounds that a substantial amount of the income came from Arab donations and some of the purported donations were returned.

The defendant had argued that some of the income were received as political donations and the remaining was his own income.

Najib’s lawyer Tan Sri Dr Muhammad Shafee Abdullah submitted, among others, that the amount received as donations were not taxable within the definition of “income” under the Income Tax Act 1967.

The judge, however, said all the defences and pleas that go to the merit of the assessment, particularly on the issue of donations or of the defendant’s own income, are questions of facts which should be heard by the Special Commissioner of Income Tax (SCIT) as the court is not the appropriate quorum.

Ahmad said the court cannot entertain any plea regarding the amount of tax sought, employing the provision expressed by the Federal Court of “pay first talk later” even though harsh, but is an intentional provision of the legislature due to the high incidence of tax evasion in the country.

He also said those purported defences are to be referred to and decided by the SCIT, hence giving rise to an absence of meritable defences that may be raised by the defendant.

“Thus, there exist no triable issues to warrant a full trial.”

He added that “all is not lost for the defendant” as the former PM had earlier filed an appeal to the SCIT on April 16, 2019. The judge also ordered Najib to pay RM15,000 in costs to the government.