Nothing illegal in tax havens, says Salleh

PETALING JAYA: There is nothing illegal in keeping money in a tax haven as it is merely a state, country or territory were taxes are levied at a very low rate or not at all, says Salleh Said Keruak.

“Tax havens in themselves are not illegal,” the Minister of Communications and Multimedia said in a blog posting, explaining that the only issue of contention tended to be the “source” of the funds and whether there was a need to hide it because it was ill-gotten gains.

“I suppose the issue of tax havens is not so much the issue of doing something illegal but more about whether it is moral,” he said, when referring to the raging debate in the UK at present after revelations that the father of David Cameron, Britain’s prime minister, was mentioned in the now controversial “Panama Papers.”

Salleh said there were in effect 82 tax havens that offered its clients “financial secrecy” with Labuan coming in at 12th place, after other more well-known countries like Switzerland, Luxembourg, Hong Kong, the Cayman Islands, Singapore and the United States among others.

Panama is listed as number 11.

“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,” Salleh said, adding that if it was a crime to keep money there, then Labuan, the brainchild of former Premier Dr Mahathir Mohamad, would need to be closed down.

The “Panama Papers”, a leak of 11.5 million files from the world’s biggest offshore law firm, Mossack Fonseca, also lists Russian President Vladimir Putin, footballer Lionel Messi, six members of Britain’s House of Lords, and the families of at least eight top officials of China.

In Malaysia, the “Panama Papers” made headlines because Mohd Nazifuddin Mohd Najib, son of Prime Minister Najib Razak was also named.

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