"Last two days has been very difficult, extremely difficult for myself and my family and today I'm making this decision to step aside as a candidate for B.C. Liberal party in Surrey-Panorama," said Dhaliwal on Friday afternoon.
"My reason for stepping aside is I want to make sure that I take care of the outstanding matters that are in front of the courts."
Court documents show the former MP and his wife were charged with failing to comply with the Income Tax Act on Oct. 15. The B.C. Liberals said Dhaliwal's candidacy was under review after the party learned of the charges on Wednesday.
Dhaliwal told reporters Friday that he wasn't aware of the tax charges until after he was acclaimed as a B.C. Liberal candidate on Oct. 31.
Dhaliwal has been quoted as saying he didn't handle the day-to-day running of the company and is attempting to straighten out the matter.
When asked why he did not reveal the charges to the party sooner, Dhaliwal told reporters Friday that his lawyer had promised him the issue would be resolved.
"I told the party and I consulted with my lawyer. The case is in the court and my lawyer at that time gave me an assurance that this will be resolved in no time, but it is taking time and that's why I'm making this decision," he said.
The tax charges and candidacy question is not the first controversy Dhaliwal has faced.
In 2008, he wrote a letter of support for gangster Ranjit Cheema, who was then serving time in a California prison.
Dhaliwal said he was encouraged by Cheema's attempts at rehabilitation. Cheema was gunned down in South Vancouver in May.
Dhaliwal lost his federal seat as a Liberal MP in the 2011 election.Suggest a correction