SRC International Sdn Bhd Appeal verdict guilty Najib Razak IRB Inland Revenue Board tax arrears bankruptcy SRC International appeal verdict guilty
Najib Razak

By Kasthuri Jeevendran

PUTRAJAYA – The Court of Appeal has rejected the request of former Prime Minister Datuk Seri Najib Razak to strike off the High Court’s decision by ordering him to pay tax arrears amounting to RM1.69 billion to the Inland Revenue Board (IRB).

Besides Najib, his son, Datuk Mohd Naziffuddin also failed in his bid to revoke the decision against him on the tax arrears.

The Court of Appeal in its summary judgment, has rejected their request amounting to RM1.69 billion and RM37.6 million each.

A summary judgement in the civil court is an accelerated judgment that does not require a full trial and in which the court’s interpretation of the pleadings forms the basis of the judgment.

IRB is in the midst of an application for the bankruptcy proceeding against Najib and Nazifuddin at the Kuala Lumpur High Court. Nevertheless, the process would depend on the summary judgement today.

On 22 July last year, the High Court has instructed Najib to pay tax arrears amounting RM1.69 billion to the IRB for the period from 2011 until 2017 via summary judgement.

Najib, then filed an appeal on the High Court’s decision.

According to Section 103(20) of the Income Tax Act 1967 (ITA), a person ordered to pay the tax assessment must make the payment to the IRB despite an appeal is filed.

On 4 February 2021, the government, through IRB has filed a notice of bankruptcy at the Kuala Lumpur High Court against Najib for failing to pay the tax arrears.

On 14 June, the High Court rejected Najib’s application for a stay of a decision by the High Court.

High Court Judge Datuk Ahmad Bache in his decision wrote that Najib had no strong grounds for a stay of execution.

“It will set a bad precedent to be followed and used by other taxpayers as a ground to avoid and/or delay paying taxes and giving rise, albeit wrongly, to an inference that ‘double standards’ are being allowed and being practiced.

“This court believes that the plaintiff through IRB is always open for discussion regarding payment. More often than not, IRB subscribes to a payment scheme whereby the taxpayer will be allowed to pay by instalments, agreed upon by both parties in a ‘win-win’ situation.

“This court takes judicial notice of this good and noble practice because about 90% of income tax cases registered before this court in one calendar year were settled in that fashion, avoiding unnecessary trials and saving judicial time,” he said when explaining his decision. -MalaysiaGazette

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RM1.69 billion tax: Najib fails to defer judgement

RM1.69 billion tax: Najib fails to defer judgement