RM1.69b tax suit meant to oust Najib from politics, court hears

The RM1.69 billion tax suit against Najib Abdul Razak is an attempt to eject him from the political arena following his immense contribution to the Opposition's victory in five by-elections, the Kuala Lumpur High Court heard.

Najib’s lead counsel Muhammad Shafee Abdullah (photo) raised this allegation concerning the former finance minister’s application to stay a legal action by the government through the Inland Revenue Board (IRB).

Najib, who was former prime minister, is seeking the stay pending his tax reassessment appeal with the IRB appeal board.

During submissions before Justice Ahmad Bache this afternoon, Shafee argued that the motive to oust Najib out of politics was allegedly evident during the rushed manner in which the suit was being carried out by the IRB, especially in its ongoing bid for a court order for summary judgment against Najib.

According to Order 14 of the Rules of Court 2012, summary judgment is a court order to issue a final ruling in a legal action if there is a clear-cut case that the defendant has no defence to the suit.

Shafee said Najib has an ongoing appeal with the IRB’s appeal board to reassess the calculation of his tax.

“Why the rush to summary judgment? The obvious conclusion is so that he (Najib) can be declared bankrupt and ousted from the political arena,” Shafee said.

“Why the hurry to push the matter to the extent to achieve for someone else’s benefit (Shafee did not clarify who he meant by this)?

“Once he is declared bankrupt, politically he will be gone. We are raising clear judicial notice here.

“My client has been instrumental in the last five by-elections (victories for the Opposition), where he has become popular. Is this (tax suit and seeming hurry to rush for summary judgment) a mala fide situation to prevent my client from continuing (in politics)?” Shafee rhetorically asked the court.

The lawyer was referring to the five recent by-election victories by the BN opposition coalition, with the Kimanis polls on Jan 18 being the fifth one.

During open-court proceedings, DP Naban — a private lawyer appointed by IRB — countered that Najib’s stay application was premature. He said the defendant still needed to pay the RM1.69 billion in total tax sought by the IRB while waiting for the outcome of tax-reassessment appeal with the IRB appeal board.

Naban, who specialises in tax matters, argued that this is because Section 103 of the Income Tax Act read with Section 106 of the Income Tax Act 1967, requires that a person pays assessed tax on the due date regardless of whether he is appealing for tax-reassessment with the IRB appeal board or not.

Section 106 empowers the IRB to initiate a civil suit to recover any tax due by an assessed person.

After several hours of submissions from both parties that went on till afternoon, Ahmad set Feb 28 for decision on Najib’s application to stay the tax suit.

If Najib does not succeed in his stay application, the court will proceed with the IRB’s application for summary judgment in the tax recovery suit against the defendant (Najib).

The government filed the suit against Najib on June 25, last year.

It sought over RM1.69 billion from the former premier, with an annual five percent interest rate beginning from the date of judgment, as well as costs and other relief deemed fit by the court.

In its statement of claim, the government said Najib had failed to pay income tax from 2011 to 2017 within the stipulated 30-day period after assessment notices were issued.

As such, the amount owed each year increased by 10 percent.

It also said Najib was given 60 days to pay the taxes, together with the 10 percent increase, but he failed to do so.

Following this, Najib was slapped with another five percent increase in the 10 percent hike, bringing the total amount of income tax due to RM1,692,872,924.83.

The final amount owed each year is as follows:

2011: RM134,180,247.10

2012: RM370,674,071.81

2013: RM1,029,767,352.60

2014: RM137,612,077.11

2015: RM19,495,822.53

2016: RM743,179.21

2017: RM400,174.47

- Mkini