Loopholes of the rich and famous

“Let me tell you how it will be

There's one for you, nineteen for me

Should five percent appear too small

Be thankful I don't take it all.”

So sang the late great Beatle George Harrison in the satirical social commentary that was Taxman, a biting tune in the group’s 1966 album Revolver.

This particular oeuvre was running through my mind about six months ago as I experienced a multi-part and quite painful interaction with Lembaga Hasil Dalam Negeri.

To be fair I was mainly to blame as there were years for which I had paid tax but not filed, and I suddenly needed it cleared for Mutual Separation Scheme (MSS) purposes.

So what if I was still paying off my student loan, had invested in an apartment that was stalled in development for nine years and my family had spent more than RM200,000 on medical bills for a loved one who needed five heart-related surgeries.

And yes, even knowing that the benefits of tax revenue are slanted racially and my family will only be receiving a fraction of the goodies many fellow citizens do - well even that wasn’t the most annoying factor.

What really annoyed me was being told by a financial journalist that I was part of less 20 percent of eligible Malaysians paying taxes. That’s because I have always worked at companies that instantly deduct and declare.

Now, I have no issues with tax relief for the poorer groups of society. In fact, that forms part of my core values – high taxation but subsidised healthcare, educational and housing needs.

What I can’t stand is that there are citizens who are clearly enjoying a more affluent lifestyle than most of us, but use loopholes to avoid contributing. Usually through setting up a business and finding so many tax exemptions and rewrite-offs that they don’t have to contribute much, if anything at all.

Exciting legislation

Now, last Thursday Prime Minister Dr Mahathir Mohamad confirmed the exciting news that the government intended to propose to table a motion in the Dewan Rakyat to make it compulsory for all MPs, including those in the opposition, and their families, to declaretheir incomes and assets to the MACC.

Currently, only Harapan MPs are required to declare their assets and income to the MACC as part of a policy that has not been codified in law.

Kudos to the new administration, which is expected to put this motion to a vote, today itself. As far as institutional reform goes, this is a big step. But will it go far enough?

Just seven months ago Finance Minister Lim Guan Eng said that Malaysia is looking to study legislation such as the UK’s Unexplained Wealth Order (UWO), with a view to introducing it here.

The UWO is a relatively new law under the UK’s Criminal Finances Act 2017, where a court order can be issued to compel someone to reveal their sources of wealth.

Those who fail to account for their wealth will have their assets seized by its National Crime Agency.

Cynthia Gabriel of the Center to Combat Corruption and Cronyism (C4 Center) explains that under such a law “the inability to explain unusual wealth that does not commensurate with an individual’s known and declared sources of income, constitutes sufficient ground to trigger an investigation into a commission of an offence”.

“While Section 36 of the MACC Act empowers the MACC to obtain information in relation to any property held or acquired by an individual, the power is, however, limited in its reach as it has to be in connection with an offence provided for under the MACC Act.

“Section 36 does not make possessing unusual or unexplained wealth an offence. Section 36 of the MACC Act only allows the MACC to investigate possession of any property if it is connected to an offence provided for under the MACC Act.

“This severely restricts the MACC’s power to comprehensively investigate matters related to corruption,” Cynthia (photo) said.

I for one, do not think we should not let the reforms end with the asset declaration move.

That just affects current politicians, whereas if corruption is as widespread as any rational person would conclude it was allowed to be in the past – well, many former politicians, corporate figures and bureaucrats would fall foul of such a law.

Just think about those whose official salaries are between RM200,000 and RM300,000 a year, but live like billionaires.

By the way, does anyone recall a former prime minister trying to explain it away as inherited wealth?

Now it may be jumping the gun, but I really think we should look at drafting more laws that will enable our enforcement agencies to have more bite.

I asked new MACC chief Latheefa Koya if the unexplained wealth policy was something she would want to pursue in the near future, but I’m afraid I didn’t get much of an answer “This is a policy matter that is within the jurisdiction of the executive. MACC’s views on matters of this nature will be conveyed to the government through the proper channels,” she told me.

PKR’s Lembah Pantai MP Fahmi Fadzil was a bit more forthcoming, saying, “Asset declaration is important, but I believe the government and MACC itself is also looking into the aspect of ‘living beyond one’s means’.”

However, Fahmi cautioned that more questions could be answered after the fate of the motion in Parliament is determined.

Another school of thought says that we should draw the line on past corruption and start anew, giving everyone a clean slate. Some even liken moves to legislate asset declaration and unexplained wealth to a witch-hunt.

“Why is Mahathir creating weapons that are suppressing and haunting the people now?” MCA’s Senator Ti Lian Ker asked, somewhat dramatically.

“It will be used and abused by future leaders as a political weapon the way the Anti-Money Laundering Act is being used now and the Internal Security Act was used prior to that,” he claimed.

“He’s not going to be in power forever,” said Ti.

Certainly one wonders if the true test of the prime minister and his appointed footsoldiers’ commitment to reform and wiping out corruption does indeed come when the unexplained wealth clause comes up for debate.

After all, there are an awful lot of people out there with some explaining to do.

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MARTIN VENGADESAN is a member of the Malaysiakini Team. - Mkini