Was deputy finance minister, IRB boss right about next-of-kin having to pay tax arrears?

One of the ways in which the Federal Government raises revenue is by taxing income through the Inland Revenue Board of Malaysia (IRB).

Towards that end, the Parliament passed the Income Tax Act 1967 [Act 53] that provides the mechanics of how IRB is to carry out its role.

Act 53 is not a mastery embodiment of the English language, enthralling its readers with drama, suspense, agony over unrequited love, and honourable closure.

It is, as with any other legislation passed, a dreary read, evidence that the assigned drafters were equally miserable when tasked with its promulgation.

It is, however, not rocket science, and Act 53 is relatively straightforward with its linguistic aims, though I believe it could have been better drafted.

My concern, however, is not over the quality of statutory drafting but on the recent report carried by the national news agency, Bernama on May 19 over comments attributed to the deputy Finance Minister, Datuk Seri Ahmad Maslan, as follows: “The government does not want to amend the Income Tax Act which stipulates that the administrator or next-of-kin of a deceased income taxpayer has to pay the tax arrears.”

Embedded in that report is the expected and unequivocal loyal support given by IRB chief executive officer, Datuk Dr Nizom Sairi, who is clearly in unison with the minister. Such remarks came in the public differences of opinion between two muftis.

On the one hand, you have the Penang Mufti, Datuk Seri Dr Wan Salim Wan Mohd Noor, who aligned himself with the minister and CEO.

On the other hand, you have the Mufti of Pahang, Datuk Seri Dr Abdul Rahman Osman, who opined that the next-of-kin should not be made liable for the income tax arrears owed by the deceased to IRB.

Subsequent to the two sides of that divide, you have into the fray, the Muzakarah Committee of the National Council for Islamic Religious Affairs (MKI), a federal entity headed by Datuk Dr Mohd Na’im Mokhtar (from the Prime Minister’s Department), endeavouring that MKI will deliberate on the issue in due course, to decide one way or the other, whether from a theological perspective and in the backdrop of Act 53, a next-of-kin should be made liable for the deceased’s income tax arrears.

Before I give my two sen worth about this whole bureaucratic fracas, a caveat is necessary as a matter of transparency.

I am not a tax lawyer despite studying basic Taxation Law in Australia circa 1995. On that, and to digress, I do observe that all my colleagues who specialise in that field are unquestionably the crème de la crème of their class, the Tom Cruises of the legal profession, so to speak, but without the exuberance of Scientology.

They are truly worth their salt, and I hope, if circumstances permit, they will weigh in with their views. That said, I am still blessed and endowed with the fact that I am not only able to read and string two sentences together without collapsing, but I do take seriously upon myself to read and be familiar with all relevant materials pertaining to the area of my work, principally, on matters legally affecting the dead, and by extension, that which also affects their heirs. Hence my interest herein.

So here is my two sen worth – if you were to read Act 53 from the beginning to the end, whilst probably suffering from bouts of mental paralysis in between, you will NOT find anywhere which states that a next-of-kin shall be legally responsible for the deceased’s income tax arrears.

If anything, you will find Act 53 stating that the “executor” (for the deceased’s estate), and in that same light, their administrator, shall be responsible for the deceased’s income tax arrears [section 74(1) of Act 53] though went on to qualify in no uncertain terms that that debt remains, a debt attached solely to the deceased’s personal estate (by correct statutory presumption), and to no other [reference to section 74(4)].

This whole affair is bizarre and unnecessary, causing undue worry to the general public, who are swamped with the need to spend precious hours reviewing every single TikTok shared with them on social media.

I do believe that had the minister and CEO of IRB actually took upon themselves to be familiar with Act 53, they would not have made those statements.

Whatever happened to their advisors? Surely, persons in that tier of administration would have been aided by troops of intellectuals unless, of course, those aids were momentarily unreachable, being preoccupied with the tail end of Hari Raya celebrations.

In any event, we must remember that taxation is a federal purview to be consistently applied throughout Malaysia and, under Article 75 of the Federal Constitution, take precedence over any state law in the event of inconsistencies between the two.

In that context, whatever views espoused by state muftis or state legislatures, whether in contradiction of or even in support of Act 53, would be purely academic and inconsequential and cannot affect the standing of the same either way unless so amended by Parliament.

Invariably, the problem here is not the contents of Act 53, which main fault is its dreariness, but the apparent abject failure by parties pitching the revolutionary pitchforks in clueless protest and pronouncements without reading the relevant contents therein, resulting in the issuance of statements and giving opinions which are just incorrect and unnecessary, and getting everyone in an exasperated bind.

I would like to make an open wager. If my thesis here is proven wrong, I will gladly sever my brother-in-law’s left ear. He does not appear to need it, and I very much would like to have all my body parts intact.

On the other hand, if I am proven correct, I would be merely content with the satisfaction of belief in self.

This is the personal opinion of the writer and does not necessarily represent the views of Twentytwo13.