KUALA LUMPUR: The High Court today allowed the Inland Revenue Board (IRB) to obtain a summary judgment against Datuk Seri Najib Razak compelling him to settle RM1.69 billion in additional income tax for the period between 2011 and 2017.
High Court Judge Datuk Ahmad Bache ruled that Najib, just like everyone else, is subject to the same provisions as ordinary people when it comes to tax matters.
"It is ony fair that the defendant, who is a former Finance Minister and former Prime Minister, be subjected to the same provision of penalty, as everyone stands equal before the law," he said, adding that under the tax recovery system of the country, courts cannot entertain any plea by a defendant when there is a debt due to the government.
Ahmad said once Najib was served with a Notice of Assessment, the court has no power to entertain any plea that the amount is excessive, incorrectly assessed, under appeal or whatsoever.
On Najib's contention that the IRB's assessment was grossly incorrect and without basis as a substantial amount of the income came from Arab donations, political donations and the remaining was his own income, the judge said these were questions of facts which should be heard by the Special Commissioners of Income Tax (SCIT).
"Thus, under the national tax scheme of Malaysia, of which the defendant being a former Finance Minister should be aware, once the Notice of Assessment is served, the tax becomes due and payable.
"The court cannot entertain any plea that the tax claimed is wrongly assessed, excessive, under appeal etcetera," he said, adding previous case laws had stated that while the pay first and talk afterwards provision may be harsh, it was intended to curb incidences of tax evasion.
The judge later also ordered Najib to pay RM15,000 in costs to the government.
IRB lawyer Abu Tariq Jamaluddin had in his submissions earlier argued that a notice of tax assessment, requiring payment to be made to the board, was applicable to all, including Najib.
He said it would be unfair to other taxpayers if Najib was exempted from paying up immediately.
However, Najib had argued that the money IRB was seeking was not from an income but donations which he had received, and therefore should not be taxable.
His lawyer Tan Sri Muhammad Shafee Abdullah had submitted that RM2.6 billion Arab donation had gone into Najib's account, but after he used the money for elections, about USD620 million was returned to the donors.
The government, through the IRB, is seeking to recover the unpaid taxes from Najib through Section 106 (3) of the Income Tax Act 1967, which reads: "In any proceedings under this section, the court shall not entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed, under appeal or incorrectly increased."
The government had on June 25 last year, filed a suit against Najib asking him to settle the unpaid tax with interest, as well as costs and other relief deemed fit by the court.
The government claimed that Najib had failed to pay his income tax from 2011 to 2017 within the stipulated 30-day period after assessment notices were issued by the IRB.
Meanwhile, another of Najib's lawyer, Muhammad Farhan Muhammad Shafee told reporters after today's proceedings that his client will be filing for a stay order as "no one in Malaysia can realistically pay RM1.69 billion to the taxman."