Wednesday, March 26, 2008

Can Malaysia Be A Tax-Free Country?

Taxes, in any forms and names are major sources of incomes to most countries in the world. Some countries such as UAE may not be totally TAX FREE with certain hidden charges or costs with different terms.

However, every citizen or resident and company does not have to pay direct taxes. There are no income tax and corporate taxes. There are some municipality taxes (for maintenance) and certain custom taxes for importing goods.

During the last election campaign, PKR had a good manifesto (here) however nothing on revamping the tax system. Could we think of something similar to TAX FREE system for the benefits of the rakyat?

Yes, there are different situations in UAE with only a handful of citizens and bountiful of wealth and resources (oil). The expatriates who are the majority and running the country are also lured with the TAX FREE benefits, even though there are hidden 'TAXES' (levies, fees, charges etc) but normally under the responsibilities of the employers. No direct impacts on employees.

We may learn one or two lessons from the Arabs in UAE. Nobody is perfect but learning through their challenges can also be beneficial. After all, UAE has been rated as the best tax-free system in the world as below and we are wooing their investments and funds as well as tourism money.

We may have an ARAB CORRIDOR, yes, Pak Lah?

The UAE has been rated as the best tax-free system in the world and the least corrupt society in the whole Arab region.

The supreme council of UAE

In its Economic Freedom Index for 2008, the United States Heritage Foundation gave the UAE 99.9 points in its Fiscal Freedom category within its overall index.
It also rated the Emirates as the least corrupt society in the Arab world, granting it 62 points in its Freedom from Corruption category.

Although the UAE got a medium rating in the overall index, ranked 63rd among the 162 countries covered by the index, it was on top of the list in some of the 10 sub categories included in the Index, which was created by the Washington-based Heritage Foundation and the Wall Street Journal in 1995.

Only Kuwait was on a par with the UAE in fiscal freedom as it got an equivalent rating, while Qatar received 99.8 points. The index gave 99.7 points each to Saudi Arabia and Bahrain and 98.5 points to Oman.

Other Arab countries received lower points as many of them impose heavy taxes given their relatively low oil resources.They included 65.4 points for Morocco, 83.2 points for Yemen, 74.8 points for Jordan and 77.0 points for Algeria and 86.2 points for Syria. Egypt and Lebanon received relatively high points as they have cut taxes within financial liberalisation and economic reforms aimed at attracting investment.

Lebanon received 91.4 points and Egypt 90.8 points, while Libya got 81.7 points although it is an oil producer.
In its definition of the Fiscal Freedom category, Heritage said it is a “measure of the burden of government from the revenue side”.
“It includes both the tax burden in terms of the top tax rate on income [individual and corporate separately] and the overall amount of tax revenue as a portion of gross domestic product (GDP),” it said.

The UAE does not have income or corporate taxes but imposes indirect token taxes, including fees on government services, on firms and individuals. Economists see no change in such a policy on the ground that the UAE is enjoying massive fiscal surpluses because of high oil prices. “Even during the height of the oil price crisis in late 1980s and 1990s, the UAE ruled out the imposition of income taxes although it was suffering from persistent budget deficits,” an economist at an Abu Dhabi-based bank said.

“I do not think the UAE now needs to impose taxes when oil prices are nearly $100 and the country controls one of the largest foreign assets in the world.”
Qatar, which has the highest per capita income in the region, received 60 points by Heritage in the least corrupt society in the Arab world category, while 57 points were given to Bahrain and 54 points to Oman.
Kuwait got only 48 points, while Saudi Arabia was rated as having a relatively corrupt system, with only 33 points.The UAE also got a good rating in the Trade Freedom category, obtaining 80.4 points, third only to Kuwait and Bahrain in the Arab region.

It also had one of the best monetary and labour systems but lagged behind in such categories as investment and property freedom.

A Country For UMNO/BN Rogues

I’m really important back home

A man claiming to be the ambassador representing a self-proclaimed independent sovereign state in Australia has appeared before judges in Dubai charged with fraud. The 48-year-old is charged with issuing false passports and attempting to sell land to UAE residents under false pretences.

The Iranian insisted at the Court of First Instance yesterday that he is the ambassador to the Hutt River Principality, 517km from Perth, and should be treated as a diplomat.

The ‘principality’ was founded in 1970 under its leader Leonard George Casley, who declared the area’s independence from the Commonwealth of Australia. Casley was elected administrator of the new ‘sovereign state’ by his family and later gave himself the title of His Royal Highness Prince Leonard of Hutt.

The rogue ‘state’ covers 75 square kilometres in area, has around 20 permanent residents and 13,000 passport holders. It minted its first coins in 1976 and uses the Hutt River Dollar as currency. Neither Australia nor any other international entity formally acknowledges that the ‘state’ exists. Denying charges of fraud and attempted fraud, the defendant told judges: “I am an ambassador and I have been in jail for 70 days although I am a diplomat.

”Asked why he didn’t appear on a list of foreign diplomats, he told the court: “We are not listed yet as we have only recently started our registration here in Dubai. We are trying to open up an embassy here in Dubai and I would like you to release me on bail so I can get the documents to prove this.

”He is charged along with two others, a 28-year-old Pakistani and a 36-year-old woman from France. All deny the charges against them. The three have been released on bail and the trial has been adjourned until a later date.

The official web site for the principality states that it came into being following a long-running dispute with the government of Western Australia over wheat quotas. The site states: “If anyone asks has our secession succeeded? Then we simply say - we are still here”.

Above article from 7DAYS General and Local News

From Gulf News below:-

Australian embassy: Province not recognised

According to the official website of the Principality of Hutt River,, it is situated 595km north of Perth, Western Australia and consists of some 18,500 acres of land.

It states that Hutt River is an Independent Sovereign State having seceded from Australia on April 21, 1970. It adds its Prince Leonard named parts of the Principality with such identities as Lake Beginning, Mount Secession, Lake Serenity and Wild Boar Gorge.

Last October, the Australian Embassy in the UAE posted on its website a statement in which the Ambassador Jeremy Bruer said the Embassy had learned an office purporting to represent the "Hut River Province" was operating in Dubai and allegedly selling travel documents. He said the Australian Government did not recognise the province legally or in any other way.

The statement said the Hutt River Province is a privately owned wheat-growing property."It has no separate sovereignty and remains subject to the Australian Constitution and the laws of Australia."