No special treatment: Najib, Nazifuddin must pay RM1.7 billion tax arrears

The Chief Revenue Counsel Dr Hazlina Hussain said it is the statutory duty of a taxpayer to pay taxes when it is due.


June 15, 2023

PUTRAJAYA – The filing of an appeal by Datuk Seri Najib Razak and his son Datuk Mohd Nazifuddin in relation to a RM1.7bil tax arrears is meant to avoid paying off what they owe the government, the Federal Court heard.

According to Chief Revenue Counsel Dr Hazlina Hussain, it was a statutory duty of a taxpayer to pay taxes when it was due.

“The main intention the Parliament enacted the law provision in relation to tax collection is to ensure that taxpayers would pay their due even when they are appealing against it.

“The rationale is for all taxpayers to be treated equally and and most importantly, to take care of the government’s coffers,” she said here on Wednesday (June 14).

The counsel said Najib and Nazifuddin should have made payments for the tax arrears after receiving the assessment notice from the Inland Revenue Board (LHDN).

“Why is there a need for special treatment in this case?

“If this is allowed, all taxpayers would not be paying their debts on grounds that they are filing an appeal,” she added.

Hazlina, who represented the government as the respondent in the suit, made the submission in the hearing of an appeal by Najib and Nazifuddin against summary judgments obtained by LHDN to recover the RM1.7bil in tax arrears.

Meanwhile, lawyer Tan Sri Muhammad Shafee Abdullah who is representing Najib and Nazifuddin said the government was trying to “bankrupt” the father and son by asking them to “pay first, talk later”.

He said to ask Najib and Nazifuddin to pay the arrears before a hearing on the merits of their appeal before the Special Commissioners of Income Tax (SCIT) would make the SCIT appeal become academic as the government would have bankrupted them prior to any findings from the SCIT.

“It is obvious the respondent in trying to bankrupt the appellants before the hearing at the SCIT.

“Whether or not the SCIT finds the amount in the arrears as incorrect and baseless, the decision would not have any bearing as Najib and his son would have suffered the consequences of being declared bankrupts,” he said.

The appeal was heard by a five-judge panel chaired by Court of Appeal president Justice Abang Iskandar Abang Hashim.

Together on the panel with him were Chief Judge of Malaya Justice Mohamad Zabidin Mohd Diah and Federal Court judges Justices P. Nallini, Mary Lim Thiam Suan and Abu Bakar Jais.

After hearing submissions from parties, the panel reserved their judgment to a date yet to be fixed.

The former prime minister and his son were appealing against two High Courts’ decisions in allowing LHDN’s application to enter summary judgments over the income tax arrears.

Two separate High Courts had allowed LHDN’s applications to enter summary judgments for it to recover tax arrears of RM1.69bil from Najib and RM37.6mil from Nazifuddin respectively for the period between 2011 and 2017.

A summary judgment is obtained when the court decides on a case only through written submissions, without a full trial or calling any witnesses to the stand.

Both Najib and Nazifuddin lost their appeals in the Court of Appeal in Sept 2021 to set aside the summary judgments.

On May 10, last year, the Federal Court granted them leave to pursue their appeals to the Federal Court.

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