Zero tolerance to keeping money in coffers

Recently, I wrote a letter to the press detailing how the government needs to splurge on enforcement in order to make back the money they wish to spend.

One such area that really needs enforcement is stopping the sales of bootleg cigarettes, which is to be done by the Customs Department.

According to The Star in 2012, the government brought RM3.28 billion into its coffers through the sales of cigarettes. However, the amount lost by the government due to illegal sales of cigarettes (34.5% of local consumption) amounts to RM1.918 billion in tax losses,  RM1.81 billion loss in excise duty revenue and RM108 million in loss of sales tax revenue.

Without leakage, this would mean that the government would have made some RM7 billion in 2012.

Unfortunately, if the losses to government is close to RM4 billion a year due to leakage, one can only wonder how much it accumulates annually to now.

Let us compare this to yet another source of revenue from Customs: the goods and services tax or GST.

According to the prime minister in his 2015 budget speech last year, the government targets to make RM5.6 billion annually through this newly introduced tax.

But if this government had actually splurged on Customs to stop the sale of bootleg cigarettes, it would still make higher income compared to the GST on an annual basis by roughly RM1.4 billion.

And Customs would not have had to waste cash on that stupid YouTube singalong video.

This is but one example of the government not getting its priorities in order.

It needs to realise that the amount leaking out through something as simple as cigarettes is in the billions, and makes even more money than the introduction of a new tax system.

Yes, there are harsh penalties in place already for those who buy and sell bootleg cigarettes, but unfortunately as of March 2015, the news has only highlighted Customs claiming victory through the arrest of three people.

And I seriously doubt three people consume a third of the cigarettes in this country which are illegal.

The government must provide Customs with adequate resources to combat something with zero tolerance, especially since we are talking about losing RM4 billion a year and rising if you take into account GST and the daily increasing number of smokers.

So will this government and its Customs Department see at least some reasoning to start enforcing their anti-bootleg tobacco programme?

One can only hope so. After all, this government’s insistence on being strapped for cash should be just the kick it needs to take this issue seriously.

Yet another issue left to the wind is the cracking down on leakage in government procurement and spending. Every year, we go through the same cycle over and over again.

Truth be told, every time an auditor-general's report is released, it is dumbfounding that nobody is brought to justice over the amount of money wasted on trifles by the Malaysian Anti Corruption Commission (MACC).

As we all know, the MACC should be true first agency to investigate the losses on an annual basis by the government and government-linked companies after the Public Accounts Committee is done.

And yet, there seems to be nothing but silence when it comes to finding out whether any action will be taken against those found guilty of obvious mishandling of public funds.

Are there perhaps investigated cases by the MACC that are not seeing the light of day?

Is the attorney-general not allowing these cases to be prosecuted?

These are questions with answers that can only be demanded from the executive branch of this country, perhaps.

While our inspector-general of police seems to take a zero tolerance stance on sedition, it is a charge that involves no ringgit and sen. Instead, zero tolerance on graft is rewarding and, in the long run, will keep our nation with a more sustainable revenue and savings.

But the final point I must make is that all these would be of no use if the government spends irresponsibly.

The bailout of 1Malaysia Development Bhd is such a case. Let us be fair, nobody knows what the company does.

Is it a property developer?

It has yet to start building anything.

Is it a financial services company?

It never made any profits even when moving cash out of the country.

Is it a power company?

Well, it owns dilapidated power plants and still can't upgrade them or list them on Bursa Malaysia to raise funds.

Yet apparently it is still a good idea?

It is an example of just what is being wasted even with large amounts that could be saved through zero tolerance on leakage.

And for this to be capped, the government must accept the reality that there will come a time when Malaysians will not be so lightly footing the bill for its mishaps. – April 9, 2015.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.