SHAH ALAM (Aug 26): Toh Puan Na’imah Abdul Khalid, the wife of former finance minister Tun Daim Zainuddin, has filed a judicial review application to set aside the Inland Revenue Board's (IRB) imposition of RM313.82 million in additional tax assessment for the year 2018.

Na’imah filed the application in the High Court here on Aug 19 via Messrs Rosli Dahlan Saravana Partnership.

In the application, Na’imah sought to quash the IRB order dated Aug 13, deeming it as ultra vires, illegal, void, unlawful and in excess of authority, irrational and unreasonable.

She also sought a declaration that the Income Tax Act (ITA) operates on a territorial basis, and it cannot be stretched so far as to require her to give information on assets which are under foreign jurisdiction, when there is no income received in Malaysia.

In addition, Na’imah sought a declaration that the ITA is a law on the imposition of tax, and not a law for the disclosure of financial sources used to fund investments. She further sought a declaration that the IRB had no basis to arbitrarily deem the assets in foreign jurisdiction were acquired in 2018.

She said the IRB had no basis to determine the market price of the foreign assets said to be assessed for the year 2018, and that the board had no right to raise the issue of the increase in share capital once again after it was raised in Daim’s tax audit previously.

Na’imah also sought a declaration that she had filed her tax jointly with Daim and hence, the IRB had no power under the law to raise an assessment against her over the same issue of the increase in share capital, as well as a declaration that the ITA only requires taxpayers to retain documents up to seven years, and costs of the application.

The case has been called for case management on Sept 3.

Na’imah is accused by the IRB for unreported income from three units of assets worth RM700.572 million. The said assets are Nantasket Beach Resort Hotel Hull, Massachusetts, Chauncy Place, Boston Massachusetts and Hotel Buckminster and Annex, Boston, Massachusetts.

She claimed that the three foreign assets were purchased by her and Daim more than 30 years ago, whereas the ITA only requires taxpayers to retain documents up to seven years.

In her affidavit in support of a judicial review, Na’imah cited Section 3 of the ITA, which stipulates that income tax shall be charged for each year of assessment upon the income accruing in or derived from Malaysia or received in Malaysia from outside Malaysia, to support her argument that taxes operates on a territorial basis.

Na’imah further claimed the issue of the increase in share capital (raised in January this year) had already been raised previously, and Daim had entered a settlement with the IRB, making the IRB's decision to revisit it irrational and unreasonable.

She further alleged that she is a target of collusion between the Malaysian Anti-Corruption Commission (MACC) and the IRB to cause her to face difficulties and to tarnish her reputation.

She further claimed that she had always acted in good faith, and gave full cooperation and made full and frank disclosure in managing her finance and tax affairs.

Prior to this, Na’imah was charged in January with not abiding by the MACC's notice to declare 12 of her purported assets to the graft body. Among them included a Mercedes-Benz EQC400 and 500 SL AUTO series, seven properties in Kuala Lumpur and one in Penang, and Ilham Tower Sdn Bhd and Ilham Baru Sdn Bhd.

Ilham Tower Sdn Bhd is the owner of Ilham Tower, and the company’s majority shares are owned by Ilham Baru, which in turn is fully owned by Daim’s wife and two children.

The single charge was framed under Section 36(2) of the MACC Act, and carries a punishment of a maximum of five years imprisonment and a fine not exceeding RM100,000. 

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