Taxpayers’ ringgit may be used to buy stocks and bonds under a proposed change to Malaysia’s tax laws set to be debated next week, according to a federal lawmaker who expressed fears of possible abuse.

KUALA LUMPUR, June 12 — Taxpayers’ ringgit may be used to buy stocks and bonds under a proposed change to Malaysia’s tax laws set to be debated next week, according to a federal lawmaker who expressed fears of possible abuse.

According to PKR MP Wong Chen, the Finance Ministry is seeking to amend the Inland Revenue Board of Malaysia Act 1995 to allow the minister to remove all of the IRB’s powers on investment matters and shift these to a new seven-member investment panel.

This would go against “good practices” of managing public finances and could see taxpayers’ monies disappear in a maze of ventures, Wong alleged.

“This action will weaken our already battered democracy as it removes and hides the rakyat’s tax money from Parliamentary scrutiny and accountability,” the Kelana Jaya MP said in a statement today.

With six out of the seven members to be directly appointed by the minister, Wong said this would effectively consolidate all investment powers in the hands of a single person.

This could come at the cost of Malaysian taxpayers who might see their tax money rechanneled for Putrajaya’s use rather than on public amenities and services.



“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.

Wong also expressed concern over how the panel will decide on which stocks to pursue with the taxpayers’ monies.

“What if the Investment Panel decides to support the opaque and questionable 1MDB listing?”

1 Malaysia Development Berhad (1MDB) is said to be planning to publicly list its power assets in Malaysia.

Opposition lawmakers have cast a wary eye on the rate at which the sovereign fund has racked up liabilities, which recently saw its total liabilities grew to RM42 billion last year from RM8.4 billion in 2012.

“We are also very concerned about accountability and transparency of the investment panel. No transparency and accountability provisions have been included in the bill,” Wong said.

He argued that the diversion of taxes into investments will effectively allow Putrajaya to “pursue more off-budget spending at will, which are not directly accountable to Parliament”.

In contrast, he said good practices in financial management would dictate that all government revenue and taxes are placed in a consolidated fund that would be subject to scrutiny by Parliament.


The Malay Mail