The rich and super rich (yes, we have them, too) don't generally like to draw attention to themselves. Unfortunately for some of them — those who evade taxes despite their monumental fortune — their wealth does that for them.
Display it or hide it, the Inland Revenue Board (IRB) knows, especially in this age of technology. Here are some numbers quoted by Prime Minister Datuk Seri Anwar Ibrahim at the IRB Day on Friday.
There are 1.5 million registered companies in the country, but only about 435,000 paid their taxes. This has been low for long. Some only pay half of what is due.
Despite this, the IRB collected a record of RM183.3 billion last year. This year it aims higher, with RM197 billion as its target.
To achieve this, the board has a twin focus: one, individuals with assets and wealth that aren't consistent with their tax declaration, and two, those with unreported incomes that are parked in overseas accounts.
In this it is helped by tax regulators around the world. Foreign banks may have been less transparent before, but in this age of social responsibility, they have a duty to disclose their clients' accounts, especially to tax authorities.
Almost all are willing to lift the lid on tax dodgers. Reputation trumps secrecy. We must not be too quick to blame the IRB for being cautious when it comes to going after elite Malaysians, who set up offshore companies to park their assets, because not all of them are for dodging taxes.
What should come under the IRB watchlist are shell companies with nominees in many shady havens. Trusts and foundations are the favourites of elites.
There are other tax streams waiting to be harvested, too. One is the million-odd registered companies that are not paying taxes. There are legally valid reasons for companies not paying taxes. Making losses is one of them.
But companies — the giants and dragons in Anwar's language — declare losses when the opposite is true, helped by a battalion of clever accountants and scheming tax lawyers.
The IRB's accountants and lawyers must learn to outsmart them. Granted, tax avoidance is not tax evasion. But there is a grey area between the two, where what is seemingly legal becomes illegal.
The IRB must be able to spot this. There may be a billion ringgit or more hidden there. Another treasure trove is the shadow economy where much gets traded but none is recorded. It is a dodgers' tax haven. It is called a "shadow" or "black" economy for a reason.
The shadow economy may not yield as much as RM98.77 billion that IRB collected from companies last year, but it will be at least equal to the RM40.96 billion it got from individual taxpayers the same year.
RM40 billion is no small change for a nation with an estimated RM1.5 trillion in debt. Sure, the debt is incurred due to leakages, which the government can and must plug.
This is not a job for the IRB, but that of the government and its bribe-busters. The IRB's task is to make taxpayers pay taxes.
Taxes pay for roads, schools and hospitals for people to enjoy. Dodging it means denying the expansion of such benefits.