LHDN gets summary judgment in RM1.05 billion tax suit against Jho Low

The Penang High Court has granted the Inland Revenue Board’s (LHDN) application for a summary judgment to recover RM1.05 billion in tax arrears from fugitive businessman Low Taek Jho or Jho Low.

Judicial commissioner Kenneth Yoong Ken Chinson St James in his decision yesterday ruled that there was neither a triable issue nor any "other reason" for there to be a trial to determine the statutory tax claim of RM1,053,972,936.58.

"I therefore allow LHDN's application to enter judgment for RM1,053,972,936.58 with interest at 5% per annum from the date of this judgment (Oct 17) to the date of full realisation," said the judge, who also ordered Jho Low to pay costs of RM15,000.

According to the judgment made available to the media today, St James held that it was a straightforward statutory tax claim, whereby the defendant (Jho Low) did not submit tax returns for the relevant years although LHDN issued assessments, to which he did not respond.

"He did not challenge the service of the assessments that he had failed to pay the total tax amount assessed," the judge added.

St James also said Jho Low’s defence that he did not have bank accounts in Malaysia during the years of assessment (2013 and 2014) and had not conducted any business in Malaysia in those two years were not reasons for him not to be obligated to pay tax. 

"To my mind, the defendant does not need to have a bank account in Malaysia to be obligated to pay tax. In other words, not having a bank account in Malaysia is not a defence to a tax claim. 

"Similarly, Jho Low does not need to conduct business in Malaysia to be obligated to pay tax. Put differently, not conducting business in Malaysia is not a defence to this tax claim," he said.

LHDN said that Jho Low failed to submit tax returns for the years of assessment of 2013 and 2014 by the prescribed annual statutory deadline, which is no later than April 30 of the year following the year of assessment.

As a result, LHDN issued notices of assessment to the defendant for the sum of RM202,575,166.56 for 2013 and RM755,582,048.52 for 2014. 

However, Jho Low did not pay the tax assessed within the prescribed 30-day time limit.

As a consequence, a 10 % increase was imposed on the assessed tax amount, namely RM20,257,516.65 for 2013 and RM75,558,204.85 for 2014.

The eventual total tax payable for 2013 and 2014 was RM1,053,972,936.58.