DPP: Income Tax Act doesn't bar criminal prosecution against Rosmah

The Income Tax Act 1967 does not bar the authorities from bringing the RM7 million money laundering and tax evasion criminal court case against Rosmah Mansor, the prosecution contended.

In an affidavit in reply against Rosmah's application to nullify the 12 money laundering counts involving RM7 million and five charges of failing to declare her income to the Inland Revenue Board (IRB), deputy public prosecutor Poh Yih Tinn rubbished her contention that the charges are baseless, defective, premature, inconclusive, and do not reveal any offence under the law.

"I also respectfully state that there is no provision under the Income Tax Act that prevents or prohibits the prosecution of offences for non-compliance with Section 77(1) of the same act until the applicant's (Rosmah) dispute on taxable income is decided by the Special Commissioners of Income Tax (SCIT)," the prosecutor said in the affidavit filed at the Kuala Lumpur High Court today.

Poh further contended that not only tax-related criminal court case is separate from any appeal by Rosmah before SCIT over tax assessment, but that the criminal court presiding over the full trial of the 17 charges is fully empowered under criminal law to hear them.

The SCIT is a non-judicial body under the IRB that hears disputes by taxpayers over tax assessment.

Previously, the criminal court set Dec 13 to hear Rosmah’s application to strike out the 17 charges.

However, the said charges were already being subjected to full trial by the criminal court on Aug 24.

‘Not the appropriate forum’

On the first day of trial, Rosmah's legal team informed the court of its intent to file the striking-out bid, following judge K Muniandy not allowing the prosecution's bid to stay the trial, pending the Attorney-General's Chambers (AGC) decision on her representation.

According to a copy of her affidavit in support of the striking-out bid, Rosmah claimed that the charges against her are baseless, defective, premature, and do not reveal any offence under the law.

The wife of incarcerated former prime minister Najib Abdul Razak contended that the charges relating to alleged tax evasion are defective and inconclusive due to there being no order from the tax authorities for her to make any tax payments.

"At all material times, the IRB director-general never handed me any assessment and/or demand and/or claim as provided for under the Income Tax Act 1967," Rosmah claimed.

She further contended that the criminal court is not the proper forum to hear tax-related issues via criminal charges and that instead, the authorities should have gone to the non-judiciary body SCIT over such issues.

"Therefore, the criminal court is not the appropriate forum to decide this. If the criminal court continues to decide over how much tax is to be paid, then it usurps the functions of the SCIT, which is the only body empowered under written law," she contended.

The charges

According to the criminal charges, the offences were purportedly committed at Affin Bank Berhad, Bangunan Getah Asli branch, ground Floor, 148 Jalan Ampang, Kuala Lumpur, between Dec 4, 2013, and June 8, 2017, and the IRB office at Kompleks Bangunan Kerajaan, Jalan Tuanku Abdul Halim, KL, between May 1, 2014, and May 1, 2018.

The money laundering charges are framed under Section 4(1) (a) of the Anti-Money Laundering and Counter-Terrorism Financing Act - which is punishable under Section 4(1) of the act with a jail term of up to 15 years and a fine of not less than five times the value of the unlawful activity proceeds or RM5 million, whichever is higher.

The tax evasion charges under Section 77(1) of the Income Tax Act 1967 claim that Rosmah failed to furnish returns of her income for the 2013 to 2017 assessment years to the IRB director-general on or before April 30, 2014, 2015, 2016, 2017 and 2018 without reasonable excuse, in contravention of Section 112 of the Act.

Previously, Rosmah was also convicted and sentenced to 10 years in jail and an RM970 million fine by the Kuala Lumpur High Court in a corruption case linked to the solar hybrid energy project for 369 rural schools in Sarawak.

However, the High Court allowed a stay on the execution of the sentence pending her appeal to the Court of Appeal to quash the guilty verdict as well as the jail term and fine.

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