High Court Quashes LHDN’s RM313.8 Million Additional Tax Demand Against Daim’s Widow Naimah Khalid

SHAH ALAM, Aug 6 — The High Court here has quashed a demand by the Inland Revenue Board (LHDN) seeking RM313.8 million in additional tax assessment from Toh Puan Naimah Khalid, ruling that the revenue authority acted beyond its statutory powers under the Income Tax Act.

High Court judge Evawani Farisyta Mohammad held that the notice issued against Naimah—the widow of former Finance Minister Tun Daim Zainuddin—for the 2018 assessment year was erroneous in law.

Delivering her judgment, Evawani emphasized that Malaysia’s Income Tax Act applies strictly to income generated locally or foreign-sourced income that has been remitted into the country.

Addressing LHDN’s assessment based on several United States properties, the court observed that the real estate had already been sold and that no evidence was produced showing that the proceeds were ever remitted to Malaysia.

“The applicant (Naimah) cannot be taxed unless she received income from the sale (of the properties) here. Even if there was income from those sales, it should have been taxed in the relevant year of assessment, which was about 30 years ago,” Evawani said.

The court also examined issues raised by LHDN regarding Naimah’s increased shareholding in Ilham Baru Sdn Bhd and purported unreported income used to settle loans involving Ilham Baru, Ilham Tower Sdn Bhd, and Welberton Private Equity Corp.

Evawani noted that those tax matters had already been resolved in 2018, adding that Daim had previously settled all taxes arising from those transactions for the relevant assessment year.

“The court is of the view that the notice issued to her for additional tax assessment for 2018 was wrong in law as it amounts to double taxation,” the judge ruled.

Naimah was represented by legal counsel S Saravana Kumar, Amira Azhar, and Dharshini Sharma, while senior revenue counsel Marina Ibrahim and Fatimah Roslan appeared for LHDN.

Welcoming the verdict, Naimah stated that she has consistently fulfilled her obligations as a taxpayer and described the judgment as a vital safeguard for citizen rights.

“This ruling shows that the judiciary is an institution the public can rely on when government bodies abuse their power,” Naimah said in a media statement following the decision.

–NMT