Amid RM1.5b tax demand report, Najib claims foreign funds not taxable

KUALA LUMPUR, April 1 — Datuk Seri Najib Razak today claimed that foreign funding is not taxable in Malaysia, following a report that he was allegedly being billed for RM1.5 billion in income tax owed to the government.

Najib noted that the new administration under Pakatan Harapan had previously accused him of receiving billions in funds from foreign sources, but insisted that such funds would not be subject to tax.

“Firstly, political contribution including from the Saudi Arabia Ministry of Finance is not subject to tax under the law.

“Secondly, as is publicly known, income obtained from abroad are not taxable under taxation laws,” the former Umno president claimed in a Facebook post.

Najib said he was the custodian of party funds, asserting that part of a RM2.6 billion sum that he was accused of receiving was also alleged to have been channelled to political parties for political work. Najib also claimed to have returned a large part of the RM2.6 billion amount.

Earlier today, The Edge Financial Daily reported that the Inland Revenue Board (IRB) has billed Najib for an extra RM1.5 billion of income tax which it said was due between 2011 and 2017.

The financial paper quoted anonymous sources saying that Najib had undeclared taxable income of close to RM4 billion during that period — which also included the RM2.6 billion that Najib has insisted was a donation he received from Saudi Arabia.

In his Facebook post today, Najib did not directly confirm receiving such a demand for RM1.5 billion in unpaid taxes or the news report.

But he alleged that the government could leak information on tax matters of any individual to the media if it was beneficial to them politically and even if such details are meant to be confidential in law.

The Edge today also quoted tax experts saying donations are subject to income tax, and Najib have committed an offence by not declaring the RM2.6 billion as his income, regardless of the source.

Last year, Najib had admitted that he did not verify the source of the RM2.6 billion that ended up in his bank account, which had allegedly been siphoned from 1Malaysia Development Bhd (1MDB).

Speaking to Al Jazeera’s 101 East show, the former prime minister said he had assumed the money was “donations” connected to Saudi Arabia’s King Abdullah bin Abdulaziz Al Saud after the latter gave assurance of his support.

Najib is facing multiple charges linked to funds belonging to 1MDB and its former unit SRC International Sdn Bhd.

His first 1MDB-linked trial is set to begin this Wednesday, while another trial is scheduled to start from April 15.