Updated: Thu, 12 Jun 2014 11:51:31 GMT | By The Malaysian Insider : Malaysia

Billions at risk if tax act amended to allow investment panel, says PKR lawmaker

Billions of taxpayers' money are at risk of being used to buy stocks, bonds, debts and properties under a proposed amendment to a tax law allowing for an investment panel that could be as secretive as 1MDB, a PKR lawmaker said. Wong Chen (PKR- Kelana Jaya) said Parliament is set to debate on the amendments to the Inland Revenue Board (IRB) of...


Malaysia Insider

Billions of taxpayers' money are at risk of being used to buy stocks, bonds, debts and properties under a proposed amendment to a tax law allowing for an investment panel that could be as secretive as 1MDB, a PKR lawmaker said.

Wong Chen (PKR- Kelana Jaya) said Parliament is set to debate on the amendments to the Inland Revenue Board (IRB) of Malaysia Act next week, which allows the Finance Minister to remove the powers of the IRB board on investment matters and replace it with a seven-member investment panel, of which six can be appointed by the minister.

He said no transparency and accountability provisions with regard to the panel have been inserted in the proposed amendments.

"This initiative by the finance minister/prime minister is highly usual; it weakens democracy and lack transparency and accountability.

"If the Bill is passed, it will essentially transform the IRB into a quasi-investment body like 1MDB under his personal control," Wong (pic) said in Parliament today, referring to the 1Malaysia Development Bhd that has courted controversy for its debts and investments.

The first-term MP said such move is against good practises and said it was an attempt to divert the investment of taxpayers' money by the minister under the cover of IRB.

Such diversion, he added, would cause distortions on fiscal data and allow the minister to pursue off budget spending at will.

"This action will weaken our already battered democracy as it removes and hides the public’s tax money from parliamentary scrutiny and accountability.

"If the finance minister has unlimited powers to utilise and divert our taxes for investments, we will surely see a correlating drop in spending of public services such as health and education," he said, adding that this also meant all government spending may be held ransom by the finance minister.

Wong also expressed his worries over the "unfettered powers" of the panel to decide which investments to invest in using taxpayers' money.

"What if our tax money is used to buy shares to support and prop up a crony company? What if the investment panel decides to support the opaque and questionable 1MDB listing?" he said in referring to state-owned sovereign fund which is planning to raise US$4.6 billion (RM15 billion) through an initial public offering of its power-generation assets.

In calling all MPs from both sides of the political divide to vote against the Bill, Wong said good practises demand that all taxes and revenues must be accounted for and placed into the Government Consolidated Fund.

Meanwhile, Rafizi Ramli (PKR - Pandan) said there was no need for another body to invest taxpayers’ money as Malaysia already had state investor Khazanah Nasional Bhd.

"I don’t see the need for another body to do such work. IRB's expertise is collecting money and not investments. Leave it to Khazanah to deal with investment matters," he said.

He said Malaysia might be the only country in the world with many sovereign funds, adding that funds split to various entities which little transparency can result in misappropriation.

Using 1MDB as example, Rafizi said the fund is "very bad" due to its lack of accountability and transparency.

"1MDB has been piling up debts after debts and its money is parked overseas and it indulged in questionable deals.

"The prime minister has the tendency and the track record to show that he prefers to administer public funds at his whims and fancies," he said.– June 12, 2014.

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