……….. to stay bankruptcy proceedings over their failure to settle tax arrears amounting to billions of ringgit.
In Nov 2013, at the opening the National Economic Empowerment (Pena) Conference at the Federal Territory Mosque auditorium, PM6 thundered that tax evaders are "traitors" to the country and that paying taxes is a pillar of patriotism.
How ironic!
Probably the definition of `traitors’ as defined by him is when the ordinary rakyat evades taxes.
But if it is the powerful and elites evading it, they are not traitors.
Lembaga Hasil Dalam Negeri (LHDN) initiated bankruptcy proceedings against PM6 and his son to recover tax arrears of RM1.69bil from PM6 and RM37.6mil from his son for the period between 2011 and 2017.
On 16 Oct 2023, the Federal Court ruled that the father and son must pay the arrears after dismissing their appeal to set aside the High Court’s decision.
The unanimous decision by a 5 member Federal Court panel upheld the Malaysia Income Tax Act 1967 principles of "pay first, talk later".
This landmark ruling reaffirmed that individuals with outstanding debts to LHDN must settle their dues before appealing to the Special Commissioners of Income Tax (SCIT).
Following the Federal Court's judgment, LHDN proceeded with bankruptcy actions against PM6 and his son.
LHDN’s recovery suit against PM6 was not out of the ordinary.
It is the tax recovery process in action.
In the application for a stay, the lawyer for PM6 argued that LHDN had “erroneously” treated a political donation received by PM6, which should have been tax exempt, as additional income and taxed him.
LHDN erroneously treated a political donation?
In both the 1MDB and SRC International trials, the courts have comprehensively dismissed the "Saudi donation" defense, ruling it untenable and based on forged documents.
During the 1Malaysia Development Berhad (1MDB) and SRC International trials in Kuala Lumpur, judges rejected these claims due to a total lack of official records, donor acknowledgment, and documentary evidence.
The High Court ruled that the four "Arab donation" letters relied upon by PM6 were forgeries.
The courts found no merit in the defense because the funds were deposited directly into personal accounts, and there were no receipts, Cabinet declarations, or formal thank-you notes exchanged with the purported royal donors.
Why Tan Sri Lee Kim Yew will be probably monitoring the decision?
In 2017, LHDN fined Country Heights Sdn Bhd (CHSB), a wholly-owned subsidiary of the property group RM22.7 million, including penalties.
The tax liabilities apparently were accrued from the years of assessment of 1997 and 1998 during the Asian Financial Crisis.
LHDN obtained a court order to seize fixed deposits of some RM126 million placed in a foreign-owned bank that reportedly are in the personal name of Tan Sri Lee Kim Yew.
The matter was resolved after that the company acknowledges the sum used to settle the tax liabilities as an amount due and owing to Lee, and that Country Heights undertakes to settle the amount as soon as it has sufficient funds to do so.
Luckily that Tan Sri Lee agreed and settle the outstanding owed by his company to LHDN.
Otherwise, he will be branded a traitor by the then PM6.
Given his own parallel legal battles with tax authorities, he will likely be following this outcome closely.
Yes, agreed that this matter was different from the case against PM6.
But………..
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