Objection to Najib's Potential Control of the Investment Panel in IRB

I just gave a press briefing in on the attempt by Najib to create an investment panel in the Inland Revenue Board! This is a mega big deal. The panel will have 7 persons,  6 appointed by him and it can invest in anything the Finance Minister decides. If this bill is passed, he will have all powers to dip into an annual tax collection of roughly RM130 billion a year. Below is my press statement:

MEDIA STATEMENT: PKR IS AGAINST THE PROPOSED DIVERSION OF TAX PAYERS MONEY BY THE FINANCE MINISTER VIA THE CREATION OF AN IRB INVESTMENT PANEL

The Finance Minister intends to create an Investment Panel in the IRB with the purpose of using our taxpayers money to buy stocks, bonds, debts and any other property that he deems fit. This proposal is contained in the amendment bill to the Inland Revenue Board of Malaysia Act 1995. This bill is likely to be debated next week. If the bill is passed, it will essentially transform the IRB into a quasi investment body like 1MDB under his personal control. This initiative by the Finance Minister/Prime Minister is highly unusual, weakens democracy and lacks transparency and accountability.

PKR is opposed to this bill for the following reasons:

1. Public Finance Management good practices demands that all taxes and revenue must be accounted for and be put into the Government Consolidated Fund. The creation of this Investment Panel within the IRB is therefore against good practices. The proposed provisions consolidates all powers to the Finance Minister, allowing him to remove all powers of the Inland Revenue Board on investment matters and replacing it with the Investment panel of which the 6 out of the 7 members are appointed directly by him. Therefore, this is an attempt to divert the investment of tax payers money by the Finance Minister under the cover of the IRB. This action will weaken our already battered democracy as it removes and hides the rakyat’s tax money from Parliamentary scrutiny and accountability.

2. This diversion of government revenue will cause distortions on fiscal data and allow the Finance Minister to pursue more off budget spending at will, which are not directly accountable to Parliament.

3. If the Finance Minster has unlimited powers to utilize and divert our taxes for investments, we will surely see a correlating drop in spending of public services such as health and education. All ministries will be affected and all Ministers may be held at ransom by the Finance Minister.

4. We are extremely concerned about the unfettered powers to invest in anything under the sky by the Finance Minister as proposed in the bill. 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.

5. We are also very concerned about accountability and transparency of the Investment Panel. No transparency and accountability provisions have been included in the bill. We have seen how lacking in accountability 1MDB has been. Do we want to put RM130 billion of yearly revenue in the hands of the same man who currently heads the 1MDB Advisory Board?

I urge all MPs, from both Pakatan Rakyat and also Barisan Nasional and also all other Ministers to unite and reject this bill. It is anti Parliamentary democracy and is an attempt to consolidate the power of the Finance Minister at the expense of all Ministries, the Parliament and also the rakyat.

YB Wong Chen

Member of Parliament for Kelana Jaya                                                                                                               

13 June 2014

---

KENYATAAN MEDIA: PKR MENENTANG RACANGAN PELENCONGAN CUKAI WANG OLEH MENTERI KEWANGAN MELALUI PEMBENTUKAN PANEL PELABURAN LHDN

Menteri Kewangan bercadang untuk mewujudkan sebuah Panel Pelaburan dalam LHDN dengan tujuan mengunakan wang pembayar cukai membeli saham, bon, hutang dan apa-apa harta lain yang difikirkannya patut. Cadangan ini adalah terkandung di dalam rang undang-undang pindaan kepada Lembaga Hasil Dalam Negeri Malaysia 1995. Rang undang-undang ini mungkin akan dibahaskan minggu depan. Jika rang undang-undang itu diluluskan, ia pada dasarnya akan mengubah LHDN kepada satu badan pelaburan seakan 1MDB di bawah kawalan peribadi Menteri Kewangan. Inisiatif ini oleh Menteri Kewangan/Perdanan Menteri adalah sangat luar biasa, melemahkan demokrasi dan tidak mempunyai ketelusan dan akauntabiliti.

PKR menentang rang undang-undang ini dengan sebab-sebab berikut:

1. Amalan baik Pengurusan Kewangan Awam menuntut bahawa semua cukai dan pendapatan mesti diambil kira dan dimasukkan ke dalam Kumpulan Wang Disatukan Kerajaan. Oleh demikian  pembentukan Panel Pelaburan dalam LHDN melanggar amalan tersebut. Cadangan ini akan mengambil kuasa pelaburan dari Lembaga Hasil Dalam Negeri dan kuasa ini diberikan kepada Panel Pelaburan di mana 6 daripada 7 ahli adalah dilantik secara langsung olehnya. Oleh itu, ini adalah satu percubaan mengambil alih kuasa pelaburan wang pembayar cukai oleh Menteri Kewangan dengan menggunakan nama baik LHDN. Tindakan ini bakal melemahkan demokrasi kerana ia akan menyembunyikan wang cukai rakyat daripada penelitian Parlimen.

2. Percubaan pelecongan cukai ini akan menyebabkan gangguan kepada data fiskal dan juga membenarkan Menteri Kewangan untuk meneruskan perbelanjaan luar bajet, yang tidak dipantau secara langsung oleh Parlimen.

3. Jika Menteri Kewangan mempunyai kuasa yang tidak terhad untuk menggunakan dan mengalihkan cukai kita untuk pelaburan, kita pasti akan melihat penurunan perbelanjaan perkhidmatan awam seperti kesihatan dan pendidikan. Akibatnya adalah semua kementerian akan terjejas dan semua Menteri-menteri akan menjadi orang tebusan kepada Menteri Kewangan.

4. Kami amat risau tentang kuasa mutlak Menteri Kewangan untuk melabur dalam apa-apa harta sahaja di bawah langit. Wang cukai kita boleh digunakannya untuk membeli saham untuk menyokong dan naikkan sesebuah syarikat kroni?

5. Kami juga sangat risau mengenai isu akauntabiliti dan ketelusan Panel Pelaburan. Tiada klausa cadangan ketelusan dan akauntabiliti di dalam rang undang-undang tersebut. Kita semua telah menyaksikan bagaimana 1MDB sedang ditadbirkan tanpa akauntabiliti dan ketelusan yang baik. Adakah kita mahu meletakkan wang cukai RM130 bilion setahunan ke tangan Menteri Kewangan yang mengetuai 1MDB Board of Advisors?

Saya menyeru kepada semua Ahli Parlimen, dari Pakatan Rakyat dan juga Barisan Nasional dan juga semua Menteri untuk bersatu dan menolak rang undang-undang ini. Rang undang-undang ini bakal melemahkan sistem demokrasi kami dan merupakan satu cubaan untuk mengukuhkan kuasa Menteri Kewangan dengan memudaratkan kuasa Kementerian, Parlimen dan juga rakyat.

YB Wong Chen Ahli Parlimen Kelana Jaya                                                                                                               

13 Jun 2014