Muhammad Shafee has RM9.4m of unpaid tax

Najib’s lawyer is also facing 2 charges of being involved in transactions of proceeds from unlawful activities


DATUK Seri Mohd Najib Razak’s lawyer, Tan Sri Dr Muhammad Shafee Abdullah (picture), is the latest individual to have received a summon from the Inland Revenue Board (LHDN) over failing to settle RM9,414,708.32 in tax.

In its lawsuit filed at the Kuala Lumpur High Court on May 6, the board said Muhammad Shafee owed the government the sum for unpaid tax over five years: 2011 (RM434,326.37), 2012 (RM978,854.11), 2013 (RM3.58 million), 2014 (RM1.73 million) and 2016 (RM1.82 million).

The amount included additional late payment penalty incurred by Muhammad Shafee’s failure to settle the outstanding tax arrears between 2011 and 2016.

The Income Tax Act states that any unpaid taxable amount that exceeded the due date will be subjected to a penalty of 10% on the outstanding amount.

An additional 5% will be imposed if the tax payable, together with the penalty, failed to be paid within 60 days from the due date.

Muhammad Shafee currently represents Najib — who is also facing similar tax arrears lawsuits from LHDN — in the SRC International Sdn Bhd and 1Malaysia Development Bhd corruption trials.

Previously, Muhammad Shafee pleaded not guilty in the Kuala Lumpur Sessions Court on Sept 13, 2018, to two counts of allegedly receiving proceeds from unlawful activities via cheques issued by Najib, which were remitted into his CIMB Bank Bhd account.

Muhammad Shafee is also facing two charges of being involved in transactions of proceeds from unlawful activities, namely, by making inaccurate statements and in contravention of Paragraph 113(1)(a) of the Income Tax Act 1967 for the financial year ending Dec 31, 2013 (FY13), and FY14.

In April, it was reported that LHDN filed a bankruptcy notice against Najib for failing to pay income tax amounting to RM1.69b as ruled by the High Court in July last year.

The tax collector filed the notice in the High Court on Feb 4 against Najib as a debtor. Based on the notice, Najib has to pay RM1.69 billion with a 5% interest rate per annum on the total balance from July 22, 2020, (date of High Court’s decision) to Feb 4, 2021, and the total payable amount as of the latter date was RM1.74 million.

On July 22 last year, the High Court ordered Najib to pay LHDN RM1.69 billion in additional tax and penalties for the periods of 2011 to 2017, after allowing LHDN’s application to enter a summary judgement against the former.

In July 2019, the government as the plaintiff filed a writ of summons and statement of claim through LHDN, naming Najib’s daughter Nooryana Najwa, 32, as the defendant, for allegedly failing to submit her individual income tax return forms to LHDN, under Section 77 of the Income Tax Act 1967, for the years of assessment from 2011 to 2017.

LHDN said the defendant had not paid the amount of income tax owed, including the increases, worth a total of RM10.3 million.

However, in August last year, the board failed in its bid for a summary judgement in its suit to recover the sum from Nooryana.

Shah Alam High Court ruled that the officer, who deposed the affidavit in support of the government’s application, did not state in the affidavit her belief that Nooryana “has no defence” to the government’s claim to tax due and payable contrary.

The judge also found the certificate exhibited by the government as proof of the amount of tax due and payable was not signed by the LDHN DG as required under Section 142 of the Income Tax Act 1967.

In other cases, LHDN sought to retrieve from Najib’s sons, Datuk Mohd Nizar (RM13.16 million) and Datuk Mohd Nazifuddin (RM37.6 million).

The orders against Mohd Nazifuddin were made on July 6, 2020, while the order against Mohd Nizar by the Shah Alam High Court was made on Sept 25, 2020.

Najib and his sons have since appealed to the Court of Appeal against the summary judgement.