Wednesday, April 6, 2016
Malaysia is number 12 on the list of 82 tax havens
Salleh Said Keruak
A tax haven is a state, country or territory where certain taxes are levied at a very low rate or not at all. In most cases tax havens offer you financial secrecy as well. Tax havens in themselves are not illegal. The issue, of course, would be the source of your money and whether you need to hide it because they were ill gotten.
I suppose the issue of tax havens is not so much the issue of doing something illegal but more about whether it is moral. And that is what is being debated in the UK regarding the British Prime Minister’s father’s name appearing in the ‘Panama Papers’.
There are 82 countries that are tax havens and which offer financial secrecy. Switzerland, of course, is number one followed by Luxembourg (2), Hong Kong (3), Cayman Islands (4), Singapore (5), United States (6), Lebanon (7), Germany (8), Jersey (9) and Japan (10).
Panama (where the controversy has erupted) is actually number 11 followed by Malaysia (Labuan) at number 12. And there are 70 more after that.
For Malaysia to become number 12 on a list of 82 tax havens, the most crucial element would be banking secrecy and tax savings. This is how they all operate. And if placing money in tax havens were a crime, then Labuan, the brainchild of Tun Dr Mahathir Mohamad, would need to be closed down.