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This article first appeared in The Edge Financial Daily on April 1, 2019

KUALA LUMPUR: The Inland Revenue Board (IRB) has slapped Datuk Seri Najib Razak with an extra tax bill of around RM1.5 billion for 2011-2017.

Sources say the amount is on top of what the former prime minister had paid based on his declared income for that seven years.

The IRB sent a letter to Najib just over a week ago stating the extra tax he has to pay, sources say.

Based on its investigations, the IRB has assessed that Najib had not declared taxable income of close to RM4 billion for the period. Sources say the amount included the infamous RM2.6 billion that Malaysian and the US investigators say originated from 1Malaysia Development Bhd (1MDB).

Najib, who faces numerous 1MDB-related charges over billions that went into his account, has insisted that the money was a donation from the government of Saudi Arabia.

Tax experts say that donations are subject to income tax, so regardless of whether the billions that went into his bank account is proven to be stolen or donation, Najib would have already committed an offence for not declaring it as income.

“All incomes are taxable, whether legitimately earned or not,” says one tax expert when asked if stolen money is subject to tax.

“If the income is illegal proceeds, it is up to other agencies like the police or Malaysian Anti-Corruption Commission to investigate if a crime has been committed.

“As far as IRB is concerned, it’s subject to income tax,” he said.

After months of delay, the trial for the first set of charges against Najib over SRC International Sdn Bhd will start on Wednesday.

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