The Art of avoiding taxes

 

Azhar Azizan Harun, the ineffective and uninspiring former speaker of the Dewan Rakyat, must rue the day when he rejected calls by the then opposition leader, Anwar Ibrahim, to hold a parliamentary debate on the Pandora Papers leak.

In October 2021, Azhar (above) told Anwar that the money involved in the Pandora Papers was not about the outflow of money to accounts abroad. He said that “some of the shares, were worth little, not to the billions. Some were just five (British) pounds only...(sic)”.

How did Azhar, whose nickname is Art Harun, get it wrong? Was he not curious about the greater implications of the Pandora Papers? Was he protecting certain individuals? Was he under orders to refuse the debate?

This leak is not just about hidden wealth because it shows how the rich, the powerful, royalty, and also corrupt politicians avoid paying taxes.

Some - not all - evade paying tax, which is illegal. For others, money laundering is also involved.

More importantly, the Pandora Papers are about cheating the government.

Tax evasion affects everyone

Many Malaysians may not appreciate the Pandora Papers leak because they think that it has nothing to do with them. On the contrary, it has everything to do with them.

When rich individuals, including and especially corrupt politicians, and corporations avoid paying taxes, think of the lost tax revenue which may run to billions of ringgits.

Taxes keep things running in the country. Governments need this money to pay for vital public services, such as better public health provisions, more schools, improved infrastructure, a low-carbon economy, and the protection of the environment.

Instead, the wealthy hide their riches and go on spending sprees, buying up property, yachts, private planes, and gems.

A corrupt politician may have told his constituency that there are insufficient funds to help the people. Just imagine the rakyat’s anger if their name is later listed in the Pandora Papers. The lies and the hypocrisy!

A corrupt politician who has stolen taxpayers’ money, or who accepted bribes in exchange for government contracts, will approach a service provider to help sort out his wealth and stash the illegal money in offshore accounts. A shell company with fake directors' names and a named bank account will be opened.

No one is able to connect this company or bank account with the corrupt individual or the rich person. What we see is that the purchase was made by an anonymous shell company.

The poor subsidising the rich

Last week, a number of individuals were invited to the MACC office to have their statements recorded in relation to the Pandora Papers exposé. Finally! Malaysians have waited a long time for this.

Although the Pandora Papers revealed the tactics of the super-rich to avoid scrutiny of their affairs, at the same time, it has given us an insight into Azhar’s refusal to allow the debate in October 2021. Was he not curious to know more?

On a basic level, the leak showed that the country has two separate systems. You and I may store our money under the mattress or in the bank. The super-rich stores their money in offshore accounts. What’s wrong with the local bank?

The leak also showed that there are two separate tax systems. Our taxes may have increased but as law-abiding citizens, we pay whatever taxes are due. It’s different for the rich and the well-connected. They avoid paying taxes with these offshore accounts.

Why should the poor and the law-abiding Malaysian subsidise the rich? Why should we be denied essential public services?

The leak also showed the hypocrisy of many politicians and many professionals.

The politicians, bankers, accountants, and lawyers, who could make it harder for tax avoidance or the hiding of assets, are themselves benefiting. So, why should they end it? We couldn’t even get past the debate stage for the Pandora Papers leak.

If it is not safe to invest money locally, as claimed by one MP who was named in the leak, then why did he not convince his peers that the money market should be properly regulated to make investing safer?

Why do MPs only think of themselves and not for the greater good of the people?

The enabler

As soon as the leak was exposed on Oct 3, 2021, governments around the world started their own internal investigations. In Malaysia, it was business as normal and even debates about the Pandora Papers were disallowed.

The then Perikatan Nasional (PN) government also accepted the explanations of the politicians who were named in the Pandora Papers. They denied wrongdoing, but - of course - they are not going to admit it if they were indeed handling illegal money, laundering funds, or avoiding taxes.

Ever since he was nominated to become speaker by the former back-door prime minister, Muhyiddin Yassin, Azhar has been an utter disappointment. His actions as speaker have been both baffling and controversial.

Instead of exercising fairness, he often sided with the then PN government.

Instead of making the super-rich and powerful politicians accountable for their actions, he did his best to appease them.

Instead of making a big difference in Malaysian politics and helping our lawmakers plug loopholes in Malaysia’s offshore banking and tax evasion schemes, Azhar became part of the problem. He was obstinate and unwieldy.

Azhar has only himself to blame if his reputation lies in tatters. - Mkini

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MARIAM MOKHTAR is a defender of the truth, the admiral-general of the Green Bean Army, and president of the Perak Liberation Organisation (PLO). Blog, Twitter.

The views expressed here are those of the author/contributor and do not necessarily represent the views of MMKtT.