Reform tax laws to uncover hidden wealth

 

They say that if you want to get rich quickly in Malaysia, become a politician. It’s simple. You make an appearance in your constituency once every five years, install new street lights, give the local school or mosque or temple a new coat of paint, treat the villagers to a feast, and you are MP for another five years.

There is anecdotal evidence that this is what happens in some parts of rural northern Perak. The quality of the roads in some villages will make one in Ipoh or Kuala Lumpur green with envy.

Nowadays, rich politicians from the usual political parties (which will remain nameless) are a dime a dozen. There are also wealthy civil servants who you suspect could not have amassed their wealth on a civil servant’s salary.

What happens if the corrupt politician or civil servant makes too much money? He does not want to invite scrutiny into his financial affairs.

In the old days, senior civil servants were reported to have carried suitcases stuffed with cash to England, Switzerland or Australia, allegedly on behalf of their MP or menteri besar. The money was stashed away in banks in these countries and also used to buy expensive properties.

Similarly, millions were deposited in Swiss banks so their owners could not be traced.

Fast forward to the present. Global politicians and the wealthy elite are still sheltering their money in offshore accounts, shell companies and real estate investments to avoid taxation and detection, as evidenced in the Pandora Papers.

Investigations showed that all the rich have to do to hide their money is to contact a wealth manager who will purchase a shell company in a tax haven somewhere in the world.

A bank account with fake names will also be made available for the rich individual to enable him to go on a spending spree. Nothing will be connected to the individual, only the shell company exists.

In October 2021, then Speaker of the Dewan Rakyat Azhar Azizan Harun dismissed then opposition leader Anwar Ibrahim’s request to debate the Pandora Papers leak. A number of leading Malaysian politicians, including a former minister and his family, had been named in the expose.

Azhar brought attention to himself by dismissing calls for a debate. Why was he not prepared to bring the rich and powerful to account? He claimed that there were more important issues to discuss.

When the Pandora Papers were published on Oct 3, 2021, other governments started their own internal investigations, but in Malaysia, we failed to get past the debating stage in Parliament.

Finally, last week, some of the individuals mentioned in the Pandora Papers leak were hauled in for questioning at the MACC headquarters.

Will anything come of it? They may not have broken any laws. What they did may not have been ethical, but it was probably not illegal.

For those who are not aware, taxes collected by the government help to fund our essential public services. When these rich individuals avoid paying taxes, they are depriving Malaysians of schools, hospitals and other necessary services.

As taxes go up, we pay the taxman what is due. It is often the law-abiding poorer Malaysian who subsidises the rich. The wealthy and corrupt avoid paying taxes because they have stashed away their wealth to offshore accounts.

It is time we reformed our tax laws to address the hidden wealth. Is the political will there? - FMT

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.