The Shah Alam High Court has denied an application by Toh Puan Na’imah Abdul Khalid, wife of former finance minister Tun Daim Zainuddin, for an interim stay against a ruling requiring her to pay RM313.82 million in tax arrears to the Inland Revenue Board (IRB). The ruling, handed down on October 18, 2024, by Judge Dr. Shahnaz Sulaiman, dismissed Na’imah’s plea, stating there were no “exceptional circumstances” that would justify halting the tax payment while her judicial review is ongoing.
Na’imah, 67, sought the interim stay pending the outcome of a judicial review she had filed on August 13, 2024, challenging the IRB's tax assessment, which she contended was based on unsubstantiated allegations. According to her, the tax demand stems from claims that she failed to declare over RM700 million in income for the year 2018, a figure she called “baseless.” Na’imah further argued that the IRB had acted beyond its authority and failed to follow proper tax audit procedures, making their actions unlawful and invalid.
In her affidavit, Na’imah claimed that the entire tax audit process appeared to have been conducted maliciously, with the IRB not adhering to established audit guidelines. She also raised concerns about a separate matter, alleging that the IRB had failed to refund her RM3.807 billion in taxes for the year 2017 and prior, adding another layer of complexity to her legal challenge.
However, Judge Shahnaz Sulaiman was firm in her ruling, emphasizing that tax payments must be made regardless of the circumstances, as stipulated under the Income Tax Act (ITA) 1967. The court ruled that the law is clear: taxes assessed by the IRB must be paid immediately, even if the taxpayer is appealing the assessment or engaging in legal proceedings. The judge noted that any tax collected could be refunded should Na’imah’s judicial review prove successful, but she would still need to pay the amount in the meantime.
“There are no special circumstances in this case that would warrant granting an interim stay,” the judge said, addressing Na’imah’s arguments that the large sum involved and potential hardship should justify a delay in payment. Judge Shahnaz pointed out that the concept of a "large sum" is relative, and for the average person, a tax bill of RM30,000 could seem substantial. Nonetheless, the law applies equally to all taxpayers, whether the amount in question is RM30,000 or RM30 million.
Na’imah and her husband, Tun Daim Zainuddin, are no strangers to legal challenges. In addition to the tax dispute, the couple is currently facing separate criminal cases related to their alleged failure to comply with the Malaysian Anti-Corruption Commission (MACC) notices to declare their assets. These ongoing legal battles add to the mounting pressure on Na’imah as she continues to contest the substantial tax arrears demanded by the IRB.
Despite her claims that the tax assessment was excessive and unjust, the court’s ruling underscores the principle that the collection of taxes is a matter of law, not negotiation. Taxpayers must fulfill their obligations, even as they dispute the amounts. This ruling reaffirms the IRB's authority to pursue tax collections rigorously, regardless of the taxpayer's standing or the sums involved.
Following the court’s decision, Na’imah’s legal team will now focus on the judicial review process, in which they will attempt to have the RM313.82 million tax bill quashed. The crux of her argument centers on what she perceives as procedural failings by the IRB, including a failure to provide adequate justification for the tax assessment and improper audit procedures. Whether this will be enough to overturn the IRB’s decision remains to be seen, but for now, Na’imah is required to settle the tax arrears while the case proceeds.
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