IRB files suit against Najib’s lawyer Shafee over RM9.41m of unpaid taxes across five years

(MMO) – The Inland Revenue Board (IRB) has filed a suit against lawyer Tan Sri Muhammad Shafee Abdullah for alleged tax arrears of some RM9.41 million (RM9,414,708.32) over a period of five years.

In its lawsuit filed at the Kuala Lumpur High Court on May 6, IRB alleged that Muhammad Shafee owed the government the sum for unpaid tax over five years — 2011 (RM434,326.37), 2012 (RM978,854.11), 2013 (RM3.58 million), 2014 (RM1.73 million) and 2016 (RM1.82 million).

The RM9.41 million included additional late payment penalty incurred by Muhammad Shafee’s failure to settle the outstanding tax arrears between 2011 and 2016.

According to the Income Tax Act, if the balance of tax payable is not paid by the due date, a penalty of 10 per cent will be imposed on the outstanding amount.

If the tax payable and penalty is still outstanding within 60 days from the due date, an additional penalty of five per cent will be imposed on the tax and penalty outstanding.

Lawyer Muhammad Farhan Muhammad Shafee, who is representing Shafee confirmed to Malay Mail of the suit’s filing but reserved further comments.

“Currently he has not been served the writ and statement of claim. Once we do get served we can comment further,” Farhan said briefly when contacted, referring to Shafee.

In court documents sighted by Malay Mail, IRB said notices of assessments for the five years were mailed to Shafee’s last known address here on May 31, 2019 but the notices were never returned to IRB.

“Since the defendant failed to settle the outstanding tax arrears within 30 days from the date of assessment mailed as stipulated under Section 103 of the Income Tax Act, an increase of 10 per cent — RM43,432.63, RM97,885.41, RM358,150, RM173,512.40 and RM182,655.78 respectively have been imposed on the overall income tax assessments 2011, 2012, 2013, 2014 and 2016 that has yet to be settled in full.

“The defendant then failed to settle the overall tax arrears inclusive of the 10 per cent increase within 60 days as stipulated under Section 103 of the Income Tax Act and therefore an increase of five per cent — RM23,887.95, RM53,836.97, RM196,982.50, RM95,431.82 and RM100,460.68 respectively have been imposed on the overall outstanding tax arrears,” the court document reads.

Muhammad Shafee currently represents former prime minister Datuk Seri Najib Razak in the SRC International Sdn Bhd and 1Malaysia Development Berhad corruption trials who is also currently facing similar tax arrears lawsuits from IRB.

The suit, filed by IRB’s senior lawyer Rohaizan Jumat, also wants the High Court to allow a five per cent annual interest to be imposed on the RM9,414,708.32 from the date of judgement until the settlement’s realisation.

“The plaintiff reserves the right to collect said outstanding income tax arrears and any increment imposed upon the defendant as taxations due to the government.

“To date, the defendant has failed to pay the plaintiff the amount of income tax totalling RM9,414,708.32,” it added.

IRB is also seeking additional costs and relief against Shafee to be decided by the court.

Previously, Shafee pleaded not guilty in the Kuala Lumpur Sessions Court on September 13, 2018 to two counts of allegedly receiving proceeds from unlawful activities via cheques issued by Najib, which were remitted into his CIMB Bank Berhad account.

Shafee is also facing two charges of being involved in transactions of proceeds from unlawful activities, namely, by making inaccurate statements and in contravention of paragraph 113(1)(a) of the Income Tax Act 1967 for financial years ending December 31, 2013 and December 31, 2014.