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Friday, November 29, 2013

On tax evaders and traitors – Sakmongkol AK47

NOVEMBER 28, 2013

The reason why the government lacks money is because they overspent indiscriminately like there’s no tomorrow. They have violated the cardinal rule of financial prudence – spend within your means. The government earns less than its spending so their finance is always in deficit.

In the meantime, they have not addressed the issue of leakages and corruption. Overall the economy is growing, only faster or slower.

The economy as a whole is growing and healthy. Wealth is created in the estates, shop and factory floors, in corporate boardrooms, through commerce etc. Only government finances and the way it conducts its business is not healthy.

The issue then is – we don’t have a revenue problem, we have a government spending problem. As long as the economy is healthy, the government will earn a portion as legitimate revenue. What it does with this portion, is the issue. How it manages it.

The truth is slowly emerging now – GST is another source of government revenue. It is efficient in terms of extracting the maximum from the public.

We worry how will this government handle that little extra. We can’t go by its record and we can’t go by the record of this PM who fails as a Finance Minister – he who simply misses the point when responding by saying don’t expect us to use candles to entertain dignitaries when faced with criticisms about his electricity bill of RM73,000 a day.

Public debt has increased tremendously under Najib’s stewardship of the economy. He is equally spindrift as the missus is.

I will be happy to instruct the PM how to catch out the tax evaders. If he doesn’t have time, I will be equally happy to tell the 3.8 CGPA graduate in the person of the deputy finance minister, who are the tax evaders and therefore traitors. Why make the big fuss and create unnecessary tension among people?

The biggest tax evaders and therefore traitors must be the biggest tax payers since they are the groups most interested to hold back paying taxes. The answer is to identify who are the biggest taxpayers and the rich who the government has not taxed.

What about the operators of the black economy – the illegal gambling and lotteries? What about the biggest operator of one armed bandits who before the GE organised one of the largest gatherings for Najib in Klang? What about the top flight bankers who earned millions in stock manipulations? What about those who do the Air Asia thing of collecting what’s due to the government upfront but refuse to hand over to the government excusing the delay to some thought out dispute?

They have the resources to evade taxes. The common people don’t have the resources and resourcefulness, tax advisers, tax lawyers, tax accountants at their disposal. The biggest traitors must come from the ranks of business cronies, and the rent seekers, the 5% who controls 40% of the nation’s income.

Don’t start shooting off our mouths suggesting the common people are the enemy and traitors. The ordinary income tax paper pays whatever is taxable off him because most of them pay as you earn. They can only pay out of the income they legally earn. The people who don’t pay taxes are those who earn over and above their declared income – those who earn money on the side by skimming off government purchases, companies that spend on themselves as expenses to avoid handing everything to the government, bankers who make tons of money who don’t pay taxes, rent seekers who earn a lot but don’t pay taxes. Arrest them first and strip them off citizenship.

Don’t care from which race. A Malay traitor is the same as a Chinese traitor and Indian traitor.

Where does the government get its revenue? Well, they get it mainly from 4 main sources – tax revenue, non-tax revenue, non-revenue receipts and revenue from federal territories.

So, if government revenue is not sufficient, the leakages must come from either one of these sources. The typical breakdown is 73% of government revenue comes from tax revenue, 25% from non-tax revenue and the balance 2% from non-revenue receipts and federal revenue receipts. But still people are in the dark, what exactly are the sources of revenue.

Taxes are divided into direct and indirect taxes. Direct taxes include the taxes we pay personally on account of our income – personal income tax. Companies earn income and pay taxes – corporate or company tax. Petronas pays petroleum taxes. Finally there is the withholding and cooperative tax.

In addition we pay stamp duties- duties paid on business transactions, agreements etc. we sell property, we pay a tax called real property gain tax. Finally we get direct taxes from the business activities in Labuan – since it’s an offshore banking centre we derive some tax revenue from there. 

The indirect taxes on the other hand include export duties, import duties, sales tax, service tax and levies. So, the common man, the kampong man pays indirect taxes when they buy goods and services. Just because he doesn’t earn a taxable income level, does not mean he doesn’t pay any tax at all. He does not pay income tax but pays sales and services tax.

If he owns a property within the jurisdiction of a local council he pays quit rent and if he owns land, he pays land taxes. So if we want to catch out the tax evaders don’t go after the hapless common man- go after the business cronies, rent seekers, monopolists, licence holders, the illegal bookies, the corrupt and the thieves. These are the traitors, Malays, Chinese, Indians or whichever Malaysian groups they belonged. –, November 28, 2013.

* Sakmongkol AK47 is the nom de guerre of Raub MP Datuk Ariff Sabri Abdul Aziz.

*This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.

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