Posted tagged ‘cronism’

With proper management Malaysia does not need GST

April 8, 2015

The much-despised and repressive consumption tax GST is finally here to drain our pockets further. Despite the appeal from many quarters to postpone it, the government went on and implemented the GST collection as per schedule. After deliberating for 23 years, the Ministry of Finance(MOF) has finally implemented GST at 6% at every stage of the supply chain. In 2014, the MOF had scrapped subsidies for fuel, electricity and sugar. Then, in 2015, the GST was implemented to increase revenue so that the high fiscal deficit incurred continuously for the past 16 years would be narrowed and to reduce the high public debt to gross domestic product or face the risk of lowering sovereign ratings by rating agencies.

Unlike Malaysia, Singapore and many other countries introduced the GST as part of a larger tax restructuring exercise to shift their reliance on direct taxes to indirect taxes. Singapore’s GST was introduced on April 1 1994 at 3%. It was increased to 4% on January 1 2003, then to 5% on January 1 2004 and finally to its current rate of 7% on July 1 2007. In Singapore, the threshold was set at an annual turnover of S$1 million (RM2.6 million) while the threshold in Malaysia is RM500,000, to be GST-compliant.

The lower threshold for GST compliance in Malaysia means an increase in the number of businesses collecting the GST. The option to increase the GST rate is left to the minister of finance. There are suspicions whether traders are raising prices arbitrarily and taking advantage of the initial uncertain period. It will take a while before clarity and confidence set in. Consumers across the board feel the pinch when they eat out or when they make purchases. The working class are unhappy and are complaining of price increases.

The Malaysian corporate tax will be reduced from 25% to 24% and from 20% to 19% for medium- sized enterprises from 2016. In comparison, Thailand has brought down its corporate tax rate to 20% while Vietnam is also scaling back to a 20% corporate tax rate from 25% by 2016. Singapore’s corporate tax has been fixed at 17% since 2010.

The successful implementation of Malaysia’s GST depends on neutral, fair and corruption-free enforcement. The GST is expected to bring in 24 billion in revenue, replacing the current 13 billion from SST from which RM3.8 billion is for exempted goods and RM4.9 billion is to be paid as BRIM, leaving behind about RM700 million in the government’s coffers. More GST revenue is expected to flow from next year onwards.

In many countries, people do not grumble about or grudge contributing to the GST because of the efficient usage of GST collections to subsidise medical care, senior citizen care, efficient government delivery systems and affordable high-quality education systems for their citizens. Malaysia too has to rise up to its people’s expectation for more social safety nets and better delivery systems.

The annual Auditor-General’s report on government usage of public funds shows no improvement all these years. Public funds are simply wasted and squandered. The prime minister’s 1Malaysia initiative to transform the government delivery system has come to naught. How then will people pay the GST without any reservation? Given the recent 1MDB fiasco and the history of imprudent and unaccountable spending by the government which has landed it with high debts, the public is sceptical about how the GST revenue will be spent.

The indiscriminate undertaking of loans by GLCs with government guarantees does not instil confidence in the government. Recently, the social media exposed another MOF GLC Pembinaan PFI debacle, with RM47 billion in loans apart from the RM42 billion 1MDB loan. High house prices and car prices, poor public transport, high cost of living coupled with low and stagnant wages have made Malaysians poorer and more indebted. On top of that, we have to pay the GST.

That’s why the opposition maintains that with proper management of our public funds, Malaysia doesn’t need the GST. Can the government improve public transport, reduce house prices, improve medical care and reduce prices to justify the implementation of the GST? Malaysians are getting impatient and want improvement without excuses straight away. The GST can be a double-edged sword for the government.

Nepal closes Malaysian visa-issuing company in embassy

January 20, 2015

The recent closure of the company operating from the Malaysian Embassy in Kathmandu by the Nepali government has opened a can of worms long- hidden from public knowledge. Malaysia VLN Nepal had been appointed by the Malaysian Home Ministry to execute the issuance of visas and had been operating for the past two years.

On Friday, (Jan 2), Malaysia VLN Nepal was asked to close down. A high-level Nepalese Parliamentary Committee on International Relations and Labour directed the Office of the Company Registrar to scrap the operating licence for Malaysia VLN Nepal. The reason was that this company did not have permission from Nepal’s Ministry of Foreign Affairs, Ministry of Labour and Employment and Ministry of Science,Technology and Environment to engage in the business of processing documents of Nepalis seeking Malaysian visas.

The company was also found to have had “shady deals”. It charged and collected Rs 3200 (RM 130) per visa but issued receipts for only Rs. 700 (RM 23). Malaysia VLN Nepal was the only company favoured by the Malaysian Home Ministry to execute the issuance of visas for almost two years.

Since the company was charging an exorbitant amount, the Nepali Parliamentary Committee has asked the Ministry of Home Affairs to retrieve the extra amount collected by the company from Malaysian visa seekers, reported the Himalayan News Service in Kathmandu.

Considering the fact that around 800 Nepalis leave for Malaysia for employment purposes every day, the visa-processing company thus generates an extra Rs 2.44 million for the embassy per day or over Rs 70 million per month. In the last year, ending July 2013, a total of 636,120 Nepali workers reportedly left to find jobs in Malaysia, making the country one of the biggest employers of Nepali citizens.

But the same Umno crony behind Malaysia VLN Nepal had also been appointed by the Home Ministry to execute the issuance of visas in India, Bangladesh and China. Such appointments cannot take place without the approval of the minister. In fact, the Umno crony is a state assemblyman from the Pekan Parliament Constituency. The interconnectedness in crony corruption in Malaysia is quite intriguing.

Malaysia VLN Nepal last month filed a request at the country’s Central Bank to transfer around Rs 30 million (RM997000) to Hong Kong and not to Malaysia. A high-ranking official at the Nepal Rastra Bank (NRB) said that all documents related to this request had been forwarded to the bank governor’s office for further inquiry as to why Hong Kong had been selected and not Malaysia.

It is indeed embarrassing for the Malaysian Government (Foreign Ministry) to allow a private company, Malaysia VLN Nepal, to collect money for visas and approve them on behalf of the Malaysian Embassy in Kathmandu. Home Minister Ahmad Zahid Hamidi should come forward to explain why a private company is allowed to operate within the Malaysian Embassy in Kathmandu and why there is a  need for a private company to issue visas and not the Home Affairs Ministry itself.

Malaysian debt level is worrisome

March 28, 2012

After 55 years of rule, the BN government’s national debt is about to hit 55 percent of the GDP. Malaysia’s indebtedness has been increasing about 1% every year. But the deputy finance Minister Datuk Awang Adek Hussin still insists that our debt level is still manageable “It is not at a critical level at the moment. Our self imposed limit or threshold is 55 percent of the Gross Domestic Product (GDP)’, He added. The national debt level in 2007 was RM266 billion but increased to RM456 billion in 2011(53.8%). It is important to take note that the debt increased by leaps and bound after March 2008. With a population of 28 million, every Malaysian has to bear RM16000 of national debt. This is what the government can show after 55 years of uninterrupted continuous rule.

Beside If we were to take into account the debts guaranteed by the federal government, the total debt exposure of the federal government hit RM573 billion in 2011 (equivalent to 67 percent of the GDP). This is an alarming situation in view of the debt crisis in Europe and North America. How did the government land in this situation? Below are some of the scandals, unaccounted spending and corrupted practices of BN rule for 55 years that has brought the current national debts.

  1. Former Work Minister Datuk Seri S. Samy Vellu once said in the Parliament that the government has compensated a total of RM38.5 billion to 20 highway companies. RM1.3 billion have been wasted building the white elephant Customs, Immigration and Quarantine (CIQ) facilities on cancellation of the Malaysia-Singapore scenic bridge. After completing highway construction with taxpayer’s money the toll concessionaires collect toll from 30-60 years.
  1. Former Deputy Prime Minister Datuk Seri Anwar Ibrahim revealed that the Central Bank has lost RM30 billion in foreign exchange trading in the 1990s. Who was the manipulator behind it? (Second Finance Minister Nor mohamad yacub was in charge of Bank Negara’s Forex trading at that time)
  1. The Bank Bumiputra twin scandals in the early 1980s saw US$1 billion (RM3.2 billion in 2008 ringgit)
  1. The Maminco attempt to corner the world tin market in the 1980s is believed to have cost some US$500 million. (RM1.6 billion)
  1. Perwaja Steel resulted in losses of US$800 million (RM2.56 billion). Eric Chia, was charged with corruption for allegedly steering US$20 million (RM64 million) to a Hong Kong-based company
  1. Use of RM10 billion public funds in the Valuecap Sdn. Bhd. operation to shore up the stock market.
  1. Banking scandal of RM700 million losses in Bank Islam
  1. The sale of M.V. Agusta by Proton for one Euro making a loss of €75.99 million (RM 348 million)
  1. For the past 10 years since Philharmonic Orchestra was established, this orchestra has swallowed a total of RM500 million

10. The government has spent a total of RM3.2 billion in teaching Maths and Science in English over the past five years. Out of the amount, the government paid a whopping RM2.21 billion for the purchase of information and computer technology (ICT) equipments which it is unable to give a breakdown. The whole project was scrapped

11. The commission paid for purchase of jets and submarines to two private companies Perimeker Sdn Bhd and IMT Defence Sdn Bhd amounted to RM910 million.

12. RM 100 million on renovation of Parliament building and leaks

13. National Astronaut Programme – RM 40 million

14. National Service Training Programme – yearly an estimate of RM 500 million

15. Eye on Malaysia – RM 30 million and another RM5.7 million of free ticket

16. RM 4.63 billion, ’soft-loan’ to PKFZ

17. RM 2.4 million on indelible ink

18. RM32 million timber export kickbacks involving companies connected to Sarawak Chief Minister and his family.


19. Two bailouts of Malaysia Airline System RM7.9 billion

20. Putra transport system, which cost RM4.486 billion

21. STAR-LRT bailout costing RM3.256 billion

22. National Sewerage System costing RM192.54 million

23. Seremban-Port Dickson Highway costing RM142 million

24. Kuching Prison costing RM135 million

25. Kajian Makanan dan Gunaan Orang Islam costing RM8.3 million.

26. Le Tour de Langkawi costing RM 3.5 Million

27. Wholesale distribution of tens of millions of shares in Bursa Malaysia under guise of NEP to cronies, children and relatives of BN leaders and Ministers worth billions of ringgits.

28. APs scandal had been going on year-after-year going back for more than three decades, involving a total mind-boggling sum of tens of billions of ringgits

29. Alienation of tens of thousands of hectares of commercial lands and forestry concessions to children and relatives of BN leaders and Ministers worth tens of billions of ringgits.

30. Travel around Malaysia and see for yourself how many white elephants like majestic arches, roads paved with fanciful bricks, designer lamp posts, clock towers, Municipal Council buildings that looks more like Istanas, extravagant places of worship, refurbishment of residences of VIPs, abandoned or under-utilised government sports complexes and buildings, etc! Combined they could easily amount to the hundreds of billions of ringgits!

31. Wastages and forward trading of Petronas oil in the 1990s based on the low price of oil then. Since the accounts of Petronas are for the eyes of Prime Minister only, we have absolutely no idea of the amount. Whatever amount, you bet it is COLLOSSAL!

There are many more scandals unexposed to the Malaysian general public. The UMNO BN government has not learnt any lessons and continues to spend as though they are born to rule this country. The recent 250 million sharizat NFC scam is another case where money was given just to spend the way sharizat and her family wants. No proper procedure and dateline to repay back?

Despite all these scandals and wastages, Indians in Malaysia are denied even basic rights. Therefore, is this the government that we want to leave behind for our children and grandchildren?  Register as voters and act now. it’s now or never.

Senator S. Ramakrishnan