Saturday, July 26, 2014

As though they are a major tax contributor [up-dated]

In the last few years, Malaysians loves to adopt a western style argument to claim their rights to be concern as taxpayers. Rightfully so.

However, Malaysians forget that their livelihood is filled with subsidies from a government policy from the Merdeka days to control inflation and make living affordable. For them to talk as taxpayers, do these Malaysian pay more tax than the benefit they received?

For some group claiming to pay more tax than others, are they a major contributor of tax? The widely held believe is that they are the biggest evader of tax by not declaring their revenue, participating in illegal underground activities and laundering the illegal money that distort market mechanism.

Tax raid

YTL's Tan Sri Francis Yeoh had recently paraded himself to the political gallery as though he is a major tax contributor to hypocritically call upon government to do away with crony capitalism which he benefited immensely.

Now he is so silent. Why? Does he pay tax?

In the midst of big coverage by Utusan  Malaysia on tax evaders, there was a report of a major raid on a public listed company.

All the while, the major tax evader known to us was Tan Sri Vincent Tan. Our University friends inside the Inland Revenue Department alleged the Director General had given Vincent Tan a tax discount of more than 60% and a leeway to pay his discounted tax of RM150 million over 18 months.

It is within the sole power of the DG but it is unfair to the rest of honest taxpayers who has to clear up their taxes in 6 months!

It was also told to us by a source that his RM1.5 billion Tropicana land controversy brother, Dato Danny Tan is also guilty of the same tax practises.

However, we were told by an enforcement officer recently that the public listed company raided was YTL. The common misguided perception is that he was pinned for his crony capitalism remarks but any government officers would argue you have to start somewhere.

Many corporations have been evading tax. The enforcement agencies will have to pursue them all for us to write about other tax evaders. For the time being it is YTL.

Whose blood will not boil when one IT industry player said that YTL will get their failed contract renewed. Chinese politicians namely Tony Pua defended Francis Yeoh on crony capitalism and SIPP Energy award but it was DAP that raised issue with [Read DAP here]

They were awarded contract at a tender price of more than RM4 billion when they are other contenders coming in at significantly lower than RM3 billion. Yet he is under investigation for not paying taxes?

Deputy Minister, Kamalanathan seems to be preparing the ground for YTL's contract renewal. Slowly but surely, he is slipping up and getting complacent.

Defending non-taxpayer

While DAP raised issue against YTL due to capital cronyism practises, DAP state assemblymen for Senai, Wong Shu Qi made a statement to oppose the proposal to charge Singaporean cars entering Johor. [Read Mael Pengerang here.]

Pemuda UMNO Johor demanded for a Vehicle Entry Permit (VEP) of RM100 in retaliation for Singapore's move to increase VEP to Malaysian registered vehicle. If Singapore wish to reduce the entry of Malaysian registered car, Malaysia has every right to reduce too.

Malaysia had to absorb infrastructure cost to cater to for Singaporean vehicles. Locals had to face  push inflationary pressure from Singaporean presence. Properties have rise beyond  affordability. Many other issues. [Read here]

Shu Qi's statement can be seen to be the new outlet for MCA's reservation to charge VEP to Singaporean registered vehicles.

As a PAP satellite political party, the popular presumption is DAP is taking care of Singapore's interest. It also means DAP is not taking care of Malaysian taxpayers interest.

The concern mentioned by Shu Qi is the economic impact of local economy, specifically retailers. But most retailers hardly pay tax and are major tax evaders. Most retailers in major shopping complexes in Johor Baru or even as far as Klang Valley and Penang are Singaporean-owned.

Why should we care? A slower economy could be that the much needed relief to the Johor Baru folks irrespective of race.

Perhaps the real reason has to do with Singapore's assistance in creating a political issue and sabotage of Rapid Pengerang. That area is where Singaporean benefited from smuggling activites and that sort of economic activities are to evade excise indirect taxes like excise duties. [Read here]

"Taxing" beneficiary

Since Malaysia had already built a special highway, Eastern Dispersal Link for vehicles entering CIQ into Singapore and Najib used to say locals will not be charged toll, might as well charge vehicles entering Singapore.

Bulk of users are non-tax paying Singaporean registered vehicles. Since so much infrastructure had to be put in place to cater for their presence in Johor Baru and government could not generate much revenue from their presence, let them pay!

Commentators of MAS claim they pay tax
MAS also attract attention of taxpayers.

The limited understanding of tax and revenue for the country was noticeable in the discussion on MAS. There are commentators talking about not wasting taxpayers money because of losses incurred by MAS.

While they are right in certain aspect, they fail to realise that MAS has contributed immensely to nation-building. They know of dollar but short of senses.

Supposedly doing strategic investment with impactful benefit to the future of our economy, Khazanah failed to understand the true value and harness the value into operating profit. Yet they talk of increasing shareholders value, in which the shareholders are the taxpayers. [Read here and here.]

Chinese tax payer
When Chinese argue in commentaries of blog, facebook, forum, and social media to demand something, they love to claim on the ground as taxpayers. Some claim they paid more taxes than Malays, Pribumis or Sabah and Sarawak, Indians and other citizens.

Collectively as a race, they control the private sector economy - corporate and retail. But are they a major tax contributor?

Without shame, they think that they are a major tax contributor thus can make demands and sometimes unreasonable ones which they expect government is obligated to secede to their demands.

On another important matter, Khazanah is responsible as a major revenue contributor to the government. GLCs are the biggest revenue contributor to the country. Sources claimed more than 70% of corporate tax is contributed by GLCs.

According to the chart above, petroleum and corporate taxes forcasted to contribute RM88,2 billion for 2013. It translate to 72.3% of direct taxes and 42.3% of total revenue.

Personal income tax is only 11.9% of revenue. That include all working Malaysian and exclude those retailers and smugglers in which the majority are Chinese.

The legally paying trades in the indirect taxes figure is 18%. Quite sure more than 10 times can be collected should enforcement be more stringent. 

Consumption tax is small vis-a-vis the size so it is only fair for GST to be introduced albeit progressively and has to be thought through.

More important, government should go after the tax evaders first. Government is raising revenue and spending for the people. However, many loud mouth are talking as taxpayers when they hardly pay tax or on collective basis, their contribution is insignificant.

Cakap saja lebih! 

Update 26/7/2014 12:30 PM:

An economist send those data yesterday. Hopefully it will answer some outburst and in-denial commentators. He argued that although GLCs are not owned by Bumipuera, it is basically run or managed by Bumiputera.

He highlighted that the 'non-tax' component consist of gas subsidy and not accounted for in neither the books of Ministry of Finance or IRD but only in Petronas.

While the Malays and Bumiputera are not as much a business owners as Chinese, the fact, which is not supposed to be an emotional issue, as presented by the data shows Bumiputera "contributing" 79.3% of tax.

As employee and various other role in the economy, Bumiputera could be contributing a higher ratio of tax to income or GDP to income than even the suspected tax evaders like Tan Sri Vincent Tan, his brother Dato Danny Tan and allegedly Tan Sri Yeoh Tong Lay and YTL.

More beneficial to the country to not enrich these tax evaders further. 


Anonymous said...

But do the Chinese get in return in term of subsidy, and other perks that the other ordinary citizens get. They are basically on their own, have you seen any Chinese in government , if there is it is countable. so to say that the government is looking only after the 50% of the population and it is easy because cross subsidy is being done. Who gets the bulks of the contract and to whose pockets does the Petroleum and GLC contracts goes , it is obvious. Therefore the 1/2 a century of discrimination must end. Cronyism must end. The money ear marked for Malays goes to the Rich Malays and when they lag behind Chinese are blamed. This must stop or there will be terrible ramifications to the country. This is not what the Tunku wanted but the squandrel Razak and his cohorts. They came from behind and caught the country by surprise.

Anonymous said...

Well written Bro. Two thumbs up.

Anonymous said...

Melayu pembayar tax terbesar negara. tlg chek dgn LHDN

Byk lari bayar cukai adalah,mereka ini lah yg x suka gst,kerana dah x blh lari dari byr cukai,

Tak haitan sbb mereka bangsa peniou.

bila GST dah di laksanakan sukar bagi mereka untuk tidak membayar cukai.

Ramai yg dah takut pasal byk menipu

Kedai kereta terpakai yg byk lari cukai coz kereta terpakai tiada kena cukai

Bila gst,penguatkuasa lhdn akan dtg u yg dia takut dan provok orgramai kata gst ni naik cukai,

Ada yg nak tutup kedai juga,gegel cina penipu

Anonymous said...

dont think 60% tax discount is possible. the DG does not have such powers to overrule the actual tax to be paid

Anonymous said...

To those who like to use the "taxpayer" argument, I have this to say. MNCs in Malaysia pay their taxes too. That doesn't make them Malaysian.


Anonymous said...

Without tax evasion, how much capitalist can make? Without a cheaper workforce, how competive capitalist can be?

So when not much could be made and competiveness declining, it wont take long before the Tiger of Asia - capitalist in commy cloth - take over the US position.

Anonymous said...

Wow!! a straight forward article without hiding the target name, like malay say " cakap terus terang tanpa berlapik". Very gentleman. This article should come from pemuda UMNO, miss them so much cause no news from them quite so long.

Anonymous said...

If thre were 100 percent declaration, the list of recipient of gov handout and subsidy would be much lesser. This is because when one is making under declaration, otomatically his name is listed as the recipient of gov subsidies such as BRIM. That account for the recipients are 50 percent non Malay?

Anonymous said...

Not so bad, lah.

What about those who steal Govt properties, misuse or spend Govt monies like it belongs to their grandfather?

Using Govt policies and the Constitution to enrich themselves.

Budget berbillion tetapi hasil dikeluarkan tak memadai.

PlazaPelangi said...

Well, if the Malaysian tax authorities are not doing their job fairly, efficiently and transparently, whose fault is it?

Or if Malaysian tax laws contain too many "loopholes", whose fault is it?

Not the taxpayers, surely?

Let's be cognisant of the fact that tax avoidance is perfectly legal. Tax evasion, on the other hand, is not.

Which is why good tax lawyers are highly paid!

Why don't you point the finger at those who are allowing Malaysians and foreigners to allegedly indulge in tax evasion?

Anonymous said...
This comment has been removed by a blog administrator.
A Voice said...

Appreciate Anon 11:20 posting a comment here but the RBA-like remarks is unnecessary.

Hmmm ... 2.000 year proud civilisation shoud be more refine in conduct and manners.

We edit the unnecessary language ...

Typically xxx xxx xxx!!!!

The tax chart that u r so elegantly paraded MUST be read with care! Instead u tried hard to cover ONE GLARING loophole to patch over yr xxx argument.

GLC’s tax & petroleum tax r paid on behalf of ALL M’sians – that typically include Chinese M’sians too. So taking that into light, the Chinese M’sians r paying even more!

So, (the) xx xxxx xxx claim that the Chinese M’sians paid most of the tax has more juice xx xxx xxxx xx. He knew/knows, bcoz he used those money to his & his family’s advantages.

Incidentally, those Chinese tycoon u mentioned r just the front men of many of yr 10% rent-seekers. The tax they managed to evaded went also to those me-layu tongkat addicts.

As far as underhanded tax evasion, why don’t u get yr ‘deep throats’ in LHDN to tell u the tax evasion stories about just one Syed Mokhtar Al-Bukhary? There r more shark there if u include Naza, Azman of EastStar DLLs.

Better still, double check where all the zakat been siphoned off & manipulated, so that minimum tax or zero tax is been achieved. This is the biggest Islamic sin that u people preferred NOT to see!

[The zakat is not your jurisdiction to talk. You have no locus standi. Muslims can talk. Furthermore, it petty and more of individual in nature.

Tax evasion is a bigger nuisance to society.]

BTW, about those retailers and smugglers evading tax, u better brush up yr business infos on Langkawi & those porous border towns along the Malacca/ Western Johor coast.

Double check also many of the diesel smuggling activities & see who r the uno kingpins running these shows.

Ever wonder why true enforcement always get ikan bilis Or NFA?

Bcoz the tongkat race has to always relied on the tax money, either halal/haram to survive. Otherwise, how to remove that rent-seeking meme that has been so craftfully been indoctrinated into them?

xxxxxxxxxxxxx xxxxxxx
xxxx xxxxxxxxxx xxxxxxxxxxxxxxx xxxxx xxxxxxxxxxxx xxxxxxxx xxxxxxxxxxx xxxxxxxx xxxxx xxxxxxxxxxxxx

Point taken but the existence of corrupt law enforcement or authorities is not a policy issue but human gullibility.

Weak law enforcement should not be a justification to defend illegal sumggling activites or any unlawful act.

If police is so bad at investigating, are you saying it is okay to commit murder?

No doubt most enforcemet and authorities in government are Malays but some Chinese government high officials could be just as corrupt or even bigger.

Corruption need to be address but to insinuate their alleged corrupt and illegal act as aceptable because others are equally corrupt is not an acceptable argument.

It is as much unacceptable to allow a systematic corruption network based on race that initiated and benefited more than the corrupt.

They are no lesser evil. But since this posting is about these unlawful tax evaders, stay focus and not argue like an RBA.

To correct you, rent seeking is not corruption. It may be a lesser evil if there is no role or need to exist in the scheme of things. However, monopoly is as evil as monopoly, sabotaging competitors and ganging up agst market entrants.

We can debate on this but mind your language.]

Anonymous said...

Chinese has always been 'chinese' most of the tiime. Some of them were very humble in the beginning of their business cycle and then later when they have made it, some of them become cocky. This similar issue happens in all races. Now our focus is on those cocky ones who began with a humble small contract from Govt or a sub-contract from Ahmad or Ali. The practise has been accepted all these years in the spirit or sharing. Ah Kow always gets the lion share of any contracts. Ahmad or Ali always has this 'tidak apa' attitude as long as some rezeki 'cukup la'.

The issue is the cocky ones like YTL, BERJAYA, AIRASIA and the rest began humbly with the Govt, kowtowing to Govt officers, spoiling them in many ways to get your first license. Now they're telling the Govt, you dumb bastards why are you not giving us more opportunities. Hello ??!! who are you ?? Oh! I'm the biggest tax payer, I have the right to screw the Govt. as I wish. Okay !? can we go thru your accounts and confirm, you are the biggest tax payer or biggest tax evader. Sorry bro, my accounts is out of bound.

I'm not discounting that there are many nice Chinese business blokes who has a very sincere a kind heart. May god bless them. They're are quiet by nature, they were fair to all their employees regardless of race. they contribute in their own way to nation building.

Hello guys, I am a Bumiputra, travel all over the world to trade my ware. I've seen it all, some countries many times worse than us, even China, if you're caught for corruption, you'll be executed and the bullets that they're gonna use to execute you, have to be paid in advance to the Govt by your family and even that still corruption survives in China. Stop arguing melayu-china thing. Bash the china or melayu or india that forgotten their roots. Bash them hard for belittling the Govt, because the Govt is you and me. This is the elected govt by the people, please respect that whether you like it or not, we are oblige to protect our Govt.

Its an open secret that 90% businesses will find ways to evade paying tax whether legally or illegally. That is a fact. Most chose the illegal ways. Don't talk about cronyism or nepotism because it happens everywhere in the world but I think for sure the lion share ends up in chinese man pocket. Say what you like, simple examples, no malay owns fleet of lorries, all chinese. No malays owns fleets of cranes, all chinese, no malay owns fleets of ships, all chinese. No malay owns fleets of cars, all chinese. Just sit on the roadside and watch all expensive cars, who sits in it, all chinese, if theres a malay he's probably just an ahmad the driver.

Now young Malays are now more educated compared to their grandfathers. They're more business minded. What I'm trying to days is how corrupt the minister or whoever, always the lion share stops in chinese pocket.

A Voice said...

Anon 11:20

I have no problem with releasing your reply despite you still sounding adversarial.

It is your right to response and I should grant you that.

It serves my cause to prove that you indirectly acknowledge from your argument that Chinese are tax evaders and are not the major tax payers.

50% of tax in this country come from petronas.

This posting is just to F... people who talks as though they are a big f___ing big deal taxpayers.

Nothing more but you have to take it more than necessary like going back to question policies that have its basis in the past even though some aspect may have failed.

You can vent your anger here but I am not releasing your response because you are bloody rude and insulting to bring Quran into your argument at the end.

Before this you tried to talk of zakat which you do not embody it. This is not a religous issue.

Rewrite your comments or it won't see daylight.

If you refuse, others will have a field day whacking at you without being able to read your response.

You may think like to accuse me of being unfair but you have no right to question that.

Remember that I own this blog and I call the shot. Play by my rule!!!

A Voice said...

5,000 years of civilisation but you are still unrefined and rude.

Lucky thing that other chinese do not behave like you

PR Lim said...

A Voice

Agree with you.

Paying taxes is a major responsibility of all citizens. It is not a racial issue but part of government.

Those who evade and avoid tax are irresponsible citizens whose action must be neither glorified or justified.

Since government companies are still the major tax payers, no one should be talking too loud of their taxes.

Unfortunately a segment of the chinese likes to speak with that kind of tone and it is giving other chinese a bad name.

True Malaysian said...


The tax issues with corporation is more complicated than that.

Your overall issue against tax evaders claiming to be major tax payers is spot on.

Major tax leakages are the underworld illegal activities, money laundering, smuggling, etc.

It is estimated to be a RM400 billion a year business.

The syndicates are operated by chinese and in-cohoot with corrupt Malay government enforcement officials.

Nevertheless, it is still not fair to brush all chinese and malays as dishonest snd corrupt

Anonymous said...

In a small town where there is a few row of shoplots, an IPTA, a polythec institution, and a huge factory belong to and run by the Malays, there is no doubt the Malays are the highest cotributors to LHDN. RBA can brags about anything and ram it down the cummies throat but the actual facts remain as it is: if consumers dont "spend a penny" the bowl will never be full and many tolled land would need reopenning for maize cropping to take place.

Anonymous said...

Where is the FELDA, RISDA. FELCRA for poor Chinese, Indians and Borneo natives. Are this people not part of the country, if yes then there will be terrible ramifications in future as the older generations were illiterate, their offsprings are not and they will question all this. Malaysia is sitting on a time bom.

Anonymous said...

USA imported the so many refined and polite talents from all corners to help built present civilization successfully. Agewise, ours are still youg comparatively but if we want to be just like the usa...those unrefined and rude talents must be made to know they are the negative elements interfering the process.

Anonymous said...

Which one would lead to more ramification?

No chinese joining Felda, Felcra, Uda and Dara; or no chinese take part in the police, armforces or security guards; or no malays in the chinese chamber of commerce and Rehda. I am more concern of the latter.

Anonymous said...

And yet najib still give tax payer money to sjk cina which is the roots of the racism in Tanah Melayu

Anonymous said...

Pemuda umno???? U must be kidding me...

Unknown said...
This comment has been removed by the author.

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