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.
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 Bestari.net 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 Bestari.net. [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.
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]
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|
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.