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KUALA LUMPUR, Dec 16 — The Finance Ministry said today several amendments to the Income Tax Act proposed during the second reading of the Finance Bill 2020 were not meant to “save” any individuals from settling outstanding tax debts with the Inland Revenue Board (IRB) since assessed tax must still be paid regardless if they appealed against it.
During the second reading of the Finance Bill 2020, which included amendments to the Income Tax Act 1967, DAP’s Jelutong MP RSN Rayer had questioned whether these amendments were proposed to provide an advantage to several MPs currently facing lawsuits in court.
“I want an explanation. For example, Pekan is currently facing a RM1.6 billion in tax arrears with the Inland Revenue of Board (IRB).
“Why (the amendments) are being proposed now? Is this to provide an advantage to manage his (court) case?” Rayer said in the Dewan Rakyat, in reference to Pekan MP Datuk Seri Najib Razak.
In July, the High Court had ruled in favour of the IRB in a summary judgment by allowing it to collect tax arrears from Najib for the amount of RM1.69 billion.
Najib subsequently filed an appeal against the summary judgement and has yet to make any payments to date.
Responding to Rayer, Deputy Finance Minister II Mohd Shahar Abdullah said the perception Rayer attempted to portray was meant to confuse the people of what the government intended to execute.
“The amendments are based on the passing of Budget 2021 which involved the people’s welfare and new tax collection mechanism without the need to introduce new taxes.
“What is claimed to save several individuals is incorrect. It has been taken out of context,” he said.
Earlier, Shahar said Malaysia practised a “pay first, challenge later” concept which aimed at being fair to compliant taxpayers and those seeking to challenge their assessments.
“It will not be fair if the latter were given an extended period of time to make payments until their lawsuit in court is concluded,” he said.
Rayer then hit back at Shahar, claiming there was a fear of compromise being made between the Pagoh and Pekan MPs as the former depended on Najib for support before imploring the government to compel Najib to repay the tax arrears.
Prime Minister Tan Sri Muhyiddin Yassin is Pagoh MP.
To which Shahar replied that whoever owes taxes to the government must pay their dues, with Rayer interjecting him by claiming the possibility of a compromise reached between Muhyiddin and Najib in return for political support.
“Will Pagoh compromise with Pekan on this issue or just to obtain his support we will just ignore him without the need to repay?” Rayer asked before Shahar resumed his replies to other queries without answering him.
On June 25 last year, the government, through the IRB, filed the suit against the Pekan MP, seeking him to pay RM1.69 billion in unpaid taxes for the period between 2011 and 2017 with interest at 5 per cent a year from the date of judgement, as well as costs and other relief deemed fit by the court.