A former director of the Association of Muslim Professionals (AMP) has failed to get a court order to stop the taxman from coming after him to make good on tax arrears totalling $117,716.
If Mr Mohd Nizam Ismail does not meet the statutory demand to settle his debt, bankruptcy proceedings can be started against him.
But this worry has been allayed for the 46-year-old lawyer and former deputy public prosecutor for now, having reached a settlement with the Inland Revenue Authority of Singapore (Iras).
He said through his lawyer See Chern Yang last night, that the "parties have reached a mutually acceptable arrangement out of court".
Mr Nizam, who has been working as a lawyer drawing $18,000 a month since last July, is a civil society activist who stepped down from the AMP last April. The statutory demand relates to unpaid taxes for three years from 2010.
Mr Nizam argued that he had worked out an instalment agreement with the Iras in March last year, which it was trying to back out of. He said he had kept to an instalment plan in 2012 but was retrenched in January 2013. That made payments difficult until he came to a new agreement with the taxman two months later.
But High Court assistant registrar Janice Wong said in judgment grounds released yesterday that she found the agreement "unworkable" and so unclear as to make it void. She said the deal was for parties to meet and reach a "reasonable agreement" on future instalments after the initial two-month period, during which he made part payments. But there was no agreed criteria or clarity as to what would amount to a "reasonable agreement".
It would be "odd" to expect the taxman to "hold his hands" until a "reasonable agreement" had been reached, she added.
She noted the Comptroller had repeatedly made clear in letters from May 2 onwards that enforcement action would be taken if Mr Nizam did not settle the arrears.
Ms Wong further rejected Mr Nizam's claim that he relied on the agreement with the taxman as he had other financial obligations such as the maintenance of his ex-wife and children, and the payment of friendly loans.
She said: "He fought off the most pressing fires by borrowing money to pay off those creditors. (He) must have known that in relation to the debt owed to the (Comptroller), he could buy some time, but actions to recover the debt would ultimately be brought against him."
By July, he was a law partner earning $18,000 a month, she said. In August, the Comptroller had offered to allow him a final payment plan of $13,000 a month, which would clear the debt by September this year.
But he had countered with monthly payments of $6,000 to end in November next year.
The Comptroller rejected the proposal in October, pointing to the long-outstanding tax arrears and the many attempts to accommodate Mr Nizam. The statutory demand then followed.
Responding to queries, an Iras spokesman said yesterday that over the past five years, there have been only three applications including this one to set aside a statutory demand and all were rejected by the courts.
"We will take appropriate actions to recover the outstanding taxes owed by the taxpayer to the State," he added.