Fire fighting

That’s why I’ve been absent from the blogging world. In laymen’s terms, my ‘client’ got hit with tonnes of queries and adjustments by IRB, so, I’ve been busy like shit.

Today, there’s this piece of news telling us there’s a website that monitors the use of the funds of the stimulus packages. In laymen’s terms, how our taxpayer’s money gets spent will be disclosed in this website.

I don’t know about you, but I can’t access that website. In laymen’s terms, it doesn’t exist.

Question 1: Where’s the money coming from?

I have a whole list of Budget bashing points, I didn’t even know where to begin. So, I thought I’d keep this post simple.

What’s a Budget? Okay, for the layman like you and I, our own personal budget is merely an account for the expected income and expenditure we’ll have for a specified period. For example, given that my pay cheque ain’t coming in till the end of the month, how do I make what measly balance I have from my previous pay cheque last till then.

I’ve scrutinized the mini Budget speech at least three times already. Therein, we have a list of what the Ministry intends to spend money on, which will be the content of many other posts to come in my mini Budget bashing series, I’m sure. But, I only found one paragraph hinting at where the money the Government (the capital “G” was how they spelt it, I merely copied) plans to spend, would come from. Here…

17.  The Government is confident that the deficit can be financed from domestic sources, given the ample liquidity in the domestic financial system. In addition, the Federal Government debt ratio is still at a prudent level. The financing of the deficit will not crowd out the private sector in sourcing funds, particularly from the bond market, which has expanded rapidly and is currently the second largest in the East Asia region.

No, I don’t understand that paragraph either.

At least he reset the bar…

The title of this post was supposed to be “I am impressed”. But then, it occured to me that in other countries, comprehensive information and details pertaining to Budgets are made public within 24 hours of the announcements anyway. So, for it to happen in Malaysia is merely meeting the expectations of a properly run Ministry of Finance, wouldn’t you say so?

Granted, one draft law is out – the one pertaining to the deferment of the banks having to tax their mortgage interest income when it refers to late payments by retrenched individuals (and I suspect any new laws for banks will come out at speed of light as long as the man’s in power and his brother runs a financial group).

The amazing part for this Malaysian tax practitioner (because I have never experienced this level of speed in getting information from the authorities… NEVER…) is that a whole “Garis Panduan Bajet Mini 2009″ has been issued! I got it two days after the Mini Budget announcement and granted that its seriously mini in size and scope, but for the IRB to have the details from the MOF and and to have produced 28 pages of details on a guideline dated 10 March, 2009, I am still recovering from the culture shock this morning.

That and the fact that the whole guideline’s in Malay. Not exactly my linguistic forte for speed reading, know what I mean?

There’s nothing for you and me…

… unless you lost your job. If you did, you save at most RM1,080 in tax ringgits. If you didn’t work at least a year in the job before you got canned, you save nothing. My guess is, those people who lost their factory jobs aren’t even in a taxable bracket, so, the tax exemption means shit.

… unless you buy a house between yesterday and the next couple of years. If you do, you save at most RM2,700 in tax ringgits. That is, if your interest on your mortgage added up to RM10,000 per year.

… unless you plan to switch your older than 10 year old car for either a Proton or a Perodua. If you do, you get RM5,000 discount of your Proton or Perodua. My guess is, you’d have gotten RM5,000 worth of discounts anyway because the market in that department is soft as the bumpers they latch onto those tin cans.

… unless you’re gonna go back to school and take up an MBA or a PhD. Even then, you’d have to pass the “meritocracy” test to get the grants. I personally think they should conduct a “meritocracy” test on the universities they want us to get those paper qualifications from…. its probably waaaaay lower in the international rankings than pond scum.

… but if you can get your hands on those syariah-compliant Savings Bonds, lock in your deposits for 3 years and get a higher return than what those stingy banks are willing to pay for interest.

… unless you’re a Bangladeshi worker who’s just bought a plane ticket to Malaysia to finally exercise your work visa. If you are, you’re screwed.

So, how does the above stimulate the Malaysian individuals to spend and revive the economy? I think you already know the answer to that.

Its Mini-Budget Day

Stay tuned…

They pretend to giveth… and they snatcheth away before ye can even smell it

Inconsiderate power abusing pricks. That’s the new term I’ll use to describe them from now on.

First, the gazette ain’t even out yet, despite the “law” supposedly having been effective from 1 January 2008. But, they issue an addendum (read: a-them-dumb, because they are) to the Public Ruling that places ridiculous restrictions so that those exemptions that the taxpayers thought should now help in belt-tightening times, are C4-ed into pieces and places far and wide it surprises even this seasoned-getting-used-to-their-idiotic-antics-tax-practitioner.

To explain my rants, let me remind you taxpayers that in Budget 2009, it was announced by the now Defense Minister that employees were meant to be given such goodies as tax exemptions for meal allowances and child care allowances from employers, amongst a slew of exemptions.

The A-Them-Dumb now reads…

Meal allowance provided to an employee for purposes such as overtime or outstation/overseas trips and other similar purposes in exercising his employment is meant to cover meal expenses of the employee. Such meal allowance is paid according to the employee’s position, duties or place where the employment is exercised. As such, any allowance pertaining to meal expenses is chargeable to tax and does not fall under this exemption. Similarly, a per diem allowance which is meant to cover meal expenses for an employee in exercising his employment is also not included in this exemption.

Reality check. A flippin’ two year old would relate a meal allowance to covering meal expenses! Which part of the word “meal” don’t you get in ”meal allowance”?! If it’s not meal expenses, then what? Use the money to buy seeds to cultivate our gardens on our apartment balconies, is it?!

Now, let’s look at how working parents are encouraged to leave their teenagers home alone to join street gangs, lepak and/ or beef up the Mat Rempit population…

For the purpose of this exemption, child means a child of the age of 12 years and below and who is a legitimate child or step-child of an individual or his wife/ husband or a child proved to the satisfaction of the Director General to have been adopted by the individual or his wife/ husband in accordance with any law.

Let’s top off this lump of shit with the fact that the a-them-dumb was issued less than 3 weeks before every employer must submit the details of every one of their employee’s taxable income. Nothing like icing that matches the cake, is there?

The abstract art of tax consultancy

Got an email from a friend who is also in the industry, so, I thought I’d share it with you.

Firstly, my friend was also lamenting about how the Revenue authorities interprete royalty, so, I suppose he sought the help of what we call in the industry, an external tax consultant; i.e. someone from one of those accounting firms with a tax outfit.

Anyway, I suppose he asked the external consultant to help with engaging the tax officer the same way I had called an officer about the same questions last week.

After obtaining “clarification” on the matter, here’s the email that came back from the external tax consultant to my friend, his client -

Dear [client],

Finally, we managed to discuss with the tax official. Based on our telephone conversation, the tax official explained that the guarantee for the result of services is one of the criteria in determining royalty. From the tax official’s perspective, basically, there is no guarantee for the result of service if the services are regarded as royalty, however, this does not mean that the provision of services without guarantee of services will be regarded as royalty.

Regards.

 

I can picture your expressions reading that. Your eyes are squinting, your brow creasing with vertical wrinkles and your jaw drops a notch if your lips aren’t already unconsciously mouthing, “What in the world…?”

You gotta admire his shamelessness

This is a short article, but for those whom have been following it (amongst many battles we’re witnessing throughout our beloved nation), you’d have read it. Just for kicks, here’s an extracted quote from the fella, justifying his non-declaration of the car and driver (amongst many other benefits) he received from (who are we kidding here?) his company -

“If I paid tax on the car, it would mean a double payment to the IRB because PNSB was also paying tax on it.”

I think I’ll just go and revise my tax returns in the last decade or so (till March 8, 2008) to reflect that reasoning and get some refund from the IRB. Wanna join me?

Here’s also something I wish our journalists could cover: Under such blatant tax evasion cases, let us count the ways our internal revenue could be increased to aid the poor during such economic turmoil -

Penalty for…

• Failure to notify chargeability – RM5,000
• For offences involving ommissions from or understatements in the Return Form not supported by accounts due to negligence – 60% of tax payable (+ 10% for every repeated offence)
• For offences involving ommissions from or understatements in the Return Form not supported by accounts due to wilful default - 75% of tax payable (+ 10% for every repeated offence)
• For fraud offences which involve understatements either in the Return Form or accounts of a deliberate nature – 100% of tax payable
• Deliberate and persistent understatements - Not less than 100% of tax payable

Now let’s throw in some that PNSB can contribute to our nation’s bailout plans…

• Failure to comply with the rules on tax deduction for employees – RM1,000 per offence (now, count the number of months per year for each year the company has existed, multiply that by the number of employees and/ or Khir Toyo and gang of benefit recipients to have a gauge)

Not enough? Try transfer pricing adjustments (cough! Mecca land deal cough!), tax auditors. Come on! These are low hanging fruits for your picking!