Najib Going Bust : It Would Take Him 1,766 Years To Pay RM1.69 Billion In Taxes - Even if a 90% Discount is Given Najib Needs to Live another 176 Years to Settle His Taxes - The Coverage
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Najib Going Bust : It Would Take Him 1,766 Years To Pay RM1.69 Billion In Taxes – Even if a 90% Discount is Given Najib Needs to Live another 176 Years to Settle His Taxes

From May 2009 to April 2018, Najib Razak earned RM58,605.15 every month as the 6th Prime Minister of Malaysia. Prior to that, he took home RM48,681.65 as the country’s 9th deputy prime minister. On top of that, his monthly allowances were RM3,846.59 as PM and RM6,508.59 as MP (2011 to 2014). The allowances were later raised to RM19,846.59 (2015 to 2018).

In other words, Najib’s total salary from Parliament and his government positions entitled him a whopping RM78,451.74 – every month – before he stepped down after his humiliating defeat in the 14th General Election in May 2018. To make calculations easier, let’s assume he had been earning the monthly RM78,000 since 1976, the year he was elected to the Parliament replacing his deceased father.

And let’s assume Najib did not spend any of the money he earned in the last 42 years (from 1976 to 2018). Assuming also he did not put his money to work at all, his bank account would have RM39 million. Still, Mr. Najib will owe a whopping RM1,653,560,924 (that’s over RM1.65 billion, mind you) of unpaid income tax to the Inland Revenue Board (IRB).

Even if he could strike a deal with the taxmen to pay by installment of RM78,000 every month, income which he no longer earns, it would take him 21,199 months to settle his taxes. That’s about 1,766 years to pay the RM1.65 billion taxes. Even if a 90% discount is given, which is impossible, Najib needs to live another 176 years to settle his taxes.

Apparently, the Inland Revenue Board (IRB) or LHDN (Lembaga Hasil Dalam Negeri) filed the suit on June 25, demanding Najib pay RM1,692,872,924.83 allegedly owed between 2011 and 2017. The lawsuit was initiated after Najib – stubbornly and arrogantly – ignored the IRB’s initial demand in March this year for additional tax assessments of RM1.47 billion.

Back in March, Mr. Najib reportedly had undeclared taxable income of close to RM4 billion between 2011 and 2017, including the infamous RM2.6 billion (US$681 million) that he has claimed was a donation received from the royal family of Saudi Arabia. That means Najib had not only evaded taxes, but also the only billionaire prime minister of the country.

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As a result of his deliberate attempt to challenge the IRB, the initial RM1.47 billion of unpaid tax saw a 10% hike of RM147 million in April and another compounded 5% hike of RM80 million in May. Under Section 103 of the Income Tax Act, the former Malaysian leader must pay the initial RM1.47 billion within 30 days of the date the assessment notice was issued.

Section 103(1) says that any tax due should be paid on time “whether or not” you are appealing against the tax calculations (if there is a dispute). Section 103(3) goes on to say that the unpaid amount on the due date will be charged an extra 10%. On top of that, if that increased tax is not settled within 60 days, you’ll be slapped another 5% according to Section 103(4).

Muhammad Farhan Muhammad Shafee, Najib’s lawyer and the son of hotshot attorney Shafee Abdullah, said the case of “pay now and talk later” would adversely impact his client. He told reporters – “The amount to the tune of RM1.69 billion will effectively bankrupt my client and disqualify him as an MP (Member of Parliament).”

Najib’s attorney was also upset that the IRB’s lawyers have indicated that they would proceed to file an application for a summary judgment, even though the former premier was contesting the matter in court. Farhan said he would be filing for a stay of proceedings pending resolution of the assessment – “They are doing this even though there is an appeal on the tax assessment.”

As the son of the so-called hotshot lawyer Shafee, which part of Section 103(1) of the Income Tax Act that attorney Farhan doesn’t understand? It says that any tax due should be paid on time, whether or not you are appealing against the tax calculations – hence pay first, talk later. Of course, if Najib has trouble paying off that tax on time, he can always request to pay by installment under Section 107B.

In actual fact, as the former prime minister, Najib should be the last person crying, whining and bitching about being victimised by the tax men. During his regime, friends and those thought to be connected to then-opposition leader Mahathir Mohamad was being harassed by the previous Barisan Nasional government – including the misuse of the IRB to intimidate businessmen still loyal to Mahathir.

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For example, Lee Kim Yew, the founder and chairman of Country Heights Holdings Bhd (CHHB), revealed how his fixed deposits of about RM126 million placed in a foreign-owned bank was seized by the IRB. The “daylight robbery”, as Mahathir called them, was carried out by the taxmen during the Najib regime to claim tax liabilities against Country Heights Sdn Bhd (CHSB), a subsidiary of of CHHB.

The tax liabilities were accrued from the years of assessment of 1997 and 1998, during the Asian Financial Crisis. Mr. Lee thought corporate tax liability and personal tax liability were two separate things. Wrong! As far as crooked Najib was concerned, it was perfectly alright to snatch away Lee’s personal cash to pay for his company’s tax liabilities.

As a result, the loyal supporter of Mahathir had to liquidate his assets to settle the income tax bill. Lee Kim Yew eventually was forced to pay RM22.7 million, including penalties, to the IRB. To humiliate Lee Kim Yew for supporting Mahathir’s campaign against Najib, the IRB was also instructed to charge billionaire Lee under AMLA (Anti Money Laundering Act) for trying to launder his “legitimate” money.

Mahathir once criticised the Najib administration – ” You know he (Lee) had paid all these taxes, but they (IRB) said he had to personally pay as well. The IRB charged people with no evidence. They said, ‘you must pay and if you don’t, then we will freeze your accounts’. So, his work and all that had to be stopped and that is how he (Najib) tortures people.”

Slamming Najib’s bully tactic, Mahathir said – “If you are seen to be close to me, you will be visited by the income tax department and by the tax people and they made ridiculous demands. Even though you have shown evidence that you have paid in full, they said no you haven’t paid. So many people had their bank accounts frozen. They couldn’t do any business.”

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But the boss of CHHB was not alone. Mahathir’s son was also targeted in 2017 when Mokhzani Mahathir’s Kencana Capital Sdn Bhd office was raided by the Inland Revenue Board (IRB), along with the offices of Mahathir’s two other sons. Now that Najib has fallen, it the despicable crook is now tasting his own medicine – only many times worse.

It’s hard to see how the IRB could bend over and grant special privilege to Najib, when every taxpayer would be subject to the same “pay first, talk later” rules whenever they didn’t pay or underpaid their taxes. And since Najib owes more than RM50,000, he could potentially be declared a bankrupt, hence disqualify him as MP for Pekan, unless he miraculously receives RM1.69 billion donations from Saudi royal family.

As a bankrupt, the least Najib should worry is that he can only use his existing credit card up to the amount of RM1,000. All his assets and properties will vest on the Director General of Insolvency (DGI) and the DGI has the responsibility to sell all such assets. In case Najib thinks he could cleverly transfer all his assets and properties to his wife or children, don’t bother.

Under the Bankruptcy Act, any settlement or transfer of property shall be void against the DGI if the settler becomes a bankrupt within 2 years after the date of settlement. Heck, the court might order Najib to pay part of his income derived from allowance as MP to the DGI. More importantly, Najib can kiss goodbye his plan to return as prime minister again in the 15th General Election.

The Inland Revenue Board (IRB) says you can be audited for up to 5 years of assessment, and there is no time limit on the audit if there is fraud or tax evasion. According to the Income Tax Act of 1967, tax evaders could face fines of RM1,000 to RM20,000 or imprisonment or both, and 300% of tax undercharged. So, Najib has a bigger problem than just bankruptcy.

Source : Finance Twitter

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