Signs of a U-Turn up ahead…

And the announcement didn’t come from the Finance Ministry. Curiouser and curiouser…

Race off all official forms? Not quite yet…

Because the service tax license application form (electronic form at the very least) still requires “Race” of the board of directors of a company to be specified… from a very extensive list. Nevertheless, it’s still there.

Has anyone seen this Guideline?

I know, I know…. I haven’t been around. But I’m back. And seeing that the Budget is coming in two weeks’ time, I suppose you should be hearing more from me soon.

Anyway, I was reading this Risk Weighted Capital Adequacy Framework (a mouthful of a hint telling you the industry I work in) where it made mention of ”Guidelines for Tax Treatment of Issuance of Innovative Tier 1 Capital Instruments by Banks/Financial Institutions”.

Weird thing is… I can’t find this guideline. Anywhere.

Googled it. Nadda.

To the clued in… a little help?

The difference between us and them…

Just read this on the Singaporean Straits Times.

In the meantime, I get a reply via email from the IRB that reads like this…

I would just like to clarify my opinion re the above given this morning.

The activity of the recipient in his country is irrelevant in determining whether the income it receives is sec 4(f) income or not. Malaysia cannot / will not decide whether the activity of the recipient is a business activity as it  doesn’t  fall under the jurisdiction of ITA 1967. If the payment made by resident person is the type of  gains or profits which falls under sec 4(f) and sec 15B, then section 109F is applicable. Thus any confirmation re its activity (the NR) will be irrelevant for this purpose.

I truly regret the incorrect or misleading advice given this morning.

And THAT, ladies and gentlemen, is the difference between us and them.

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.

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…?”

A rumour

… that the Thin Cap rule is on the verge of postponement or being canned.

Do they ever consult each other?

The news today is Baffling. Okay, news in this country has always been baffling. But this one gives the word a capital B.

First, they announced that there’s gonna be a toll rate increase come this Sunday. And then, get this… the PM objects… to a decision made “two or three weeks ago”!!

Now, the Baffling part. The PM then said that whilst the toll rate increase decision was made less than a month ago… “however the situation has now changed, and the economy has not become better as yet.” 

What the hell is he talking about?! What’s changed?! Okay, nevermind. The other point, which has now been overshadowed, of course, is that a member of his own cabinet goes through the trouble of announcing something which he then takes to the media to denounce. There’s also another, buried between the lines, bit of question to this Baffling stimulus-killing fiasco - Where’s the “this means the Government has been paying compensation for 14 months” money coming from? No. No prizes.

Since everything else has been postponed, why not?

‘Tis a mini Budget, says the Finance Minister.

Spite the federal government by keeping the opposition states well funded

Translates to: Pay your property assessments, fellow Selangorians, Penangites, Kelantanees, Perakians (despite your current limbo) and… err… am I missing a state?

Anyway, February is the month for settlement of your assessment. That goes straight to the state government. Lets you keep your house and keep the state run machinery oiled. Keeps the opposition from having to beg for federal funds all the time. Keeps the shmucks in power from being all smug about turning down the opposition states their dues and requests when that happens. Lots of positive things. 

P.S. Hmmm… (pondering the message I should be sending to assessment payers of Be-End led states)

Update @ 5.30pm: Perakians, you have been betrayed. Plus, not to mention our tax monies are funding those froggies’ travelling costs to Putrajaya to show their still-dare-to-show-face muka tembok! Toads! All of them!