Najib fails to get stay order against IRB’s demand for RM1.69b in tax arrears

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The judge said granting Najib a stay would set a bad precedent to be followed and used by other taxpayers as grounds to avoid or delay paying taxes.


Datuk Seri Najib Razak has failed in his bid to obtain a stay against an order compelling him to pay RM1.69 billion in income tax arrears to the Inland Revenue Board (IRB).

High Court judge Datuk Ahmad Bache in dismissing the former prime minister’s application said Najib had no strong grounds for a stay of the execution of the court’s July 22, 2020 order.

He said Najib had failed to show the existence of any special circumstances to obtain a stay order.

The decision was delivered via email this afternoon.

In his judgement, Ahmad said a tax due and payable must be paid first regardless of any appeal objections as expressed in Sections 103 and 106 of the Income Tax Act 1967.

He said the firm position of the law was entrenched as the Apex Courts had affirmed the same, in what is called the “pay first, talk later” principle.

The principle, he said, has withstood the test of time until today.

“Any decision otherwise would undermine the main objective of the Act that is to give the plaintiff (government) the power to collect and recover taxes that are due and payable as revenue to the government within a specified period.

“The Income Tax Act should be interpreted with public interest in mind and not an individual’s interest,” he added.

The judge said granting Najib, the former prime minister and former Finance Minister a stay, would set a bad precedent to be followed and used by other taxpayers as grounds to avoid or delay paying taxes.

This, the judge said, would give rise, albeit wrongly, to interference that “double standards” are being allowed and practised.

He also ordered Najib to pay RM15,000 in costs.

The judge said Najib could still negotiate with the IRB for some payments to be made pending the disposal of the hearing of his tax-reassessment appeal with the Special Commissioners of Income Tax (SCIT).

“The plaintiff had indicated to the court that whilst the defendant has made some efforts in meeting the plaintiff’s officials for discussions, but to date, no efforts have been made to make any form of payments to the plaintiff, perhaps in the form of instalments.

“This court believes that the plaintiff is always open for discussion regarding the payment,” the judge said.

On July 22, last year, the court allowed the IRB’s application for a summary judgement to be entered against Najib in its suit to recover the RM1.69 billion in taxes from the latter for the period between 2011 and 2017.

He was ordered to pay the sum.

Najib subsequently filed an appeal at the Court of Appeal against the court’s decision and the appeal has been set for hearing on June 16.

The board had on Feb 4 issued a bankruptcy notice against Najib following the Pekan MP’s failure to pay the amount.

On June 25, 2019, the government, through IRB filed the suit against Najib asking him to settle the unpaid tax with interest at 5 per cent, a year from the date of judgment, 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. – NST