☕️ RM2.1 billion of GST uncollected, even 5 years after its abolishment

1. MARKET SUMMARY 📈

2. NUMBERS AT A GLANCE 🔢

Despite being abolished almost five years ago, 26,000 companies and business entities still owe Goods and Services Tax (GST) arrears amounting to nearly RM2.1 billion, according to Customs director-general Zazuli Johan. The amount includes arrears and the penalty imposed on all companies and business entities late in making GST payments implemented in 2015. On the other hand, Ukrainians are paying more tax than required to support their country’s defence. According to Ukraine’s finance ministry, in March last year, such donations came to USD880 million.

Before the bailout by the Swiss Government, take a guess how much money was withdrawn from Credit Suisse in the first quarter of 2023. USD68.6 billion left the bank in the first three months of the year. Once the country’s second-largest bank Credit Suisse, had been loss-making and had faced a string of problems in recent years, including money laundering charges. It reported a loss of 7.3 billion Swiss francs in 2022.

150,000 hens were killed in a fire at a poultry farm, by accident, in Japan’s top egg-producing prefecture, Ibaraki prefecture, last week. The country, currently facing an egg shortage due to the bird flu, is seeing some restaurants removing dishes that require eggs from their menu. In addition, a record 10.08 million chickens were scheduled to be culled in January 2023 because of the bird flu that was detected in October 2022.

Together with Daily CMO

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3. IN MALAYSIA 🇲🇾

UMNO supreme council member Puad Zarkashi questioning those opposing Najib Razak’s pardonAfter Amanah, Puad Zarkashi now turned to MUDA and lambasted the minnow party for opposing any move to save former PM Najib Razak via a royal pardon. Furthermore, Puad stated that MUDA is hypocritical as the party’s president, Syed Saddiq, is not ‘pure and clean’ and is currently facing corruption charges.

Najib Razak’s royal pardon is a hot topic at the moment, even mentioned by former Bangi MP Ong Kian Ming in the ‘Keluar Sekejap’ podcast. Ong said that his party DAP could swallow a lot of compromises to work with others to form a unity government. However, there is one thing that DAP grassroots cannot tolerate, which is giving Najib Razak a free get-out-of-jail card from serving 12 years in jail for misappropriating SRC International Sdn Bhd’s RM42 mil.

During his interview on the podcast, Ong stated that both ousted UMNO leaders, Khairy Jamaluddin and Shahril Hamdan, fit the bill as prime ministerial candidates for DAP if they choose to join the party. Ouch to the current Bangi MP.

Federal Court allows the election petitions by BN to go to full trialThe Federal Court, chaired by a three-judge quorum led by Chief Justice Tengku Maimun, unanimously decided that a full trial be conducted at the respective Election Courts, following Barisan Nasional (BN) led election petitions. In the petitions, BN is disputing the election victories of Kemaman MP Che Alias Hamid and Masjid Tanah MP Mas Ermieyati in GE15. BN accused that the victories by both Perikatan Nasional (PN) MPs were laced with bribery allegations. Apart from that, the Kuala Terengganu and Marang election petitions are still ongoing. PN’s Ahmad Amzad and PAS President Abdul Hadi Awang are the MPs for Kuala Terengganu and Marang, respectively.

Putrajaya to open more roads to ease Klang Valley’s trafficDeputy PM Zahid Hamidi stated that Putrajaya had already instructed five local councils for Kuala Lumpur, Petaling Jaya, Shah Alam, Subang Jaya and Ampang Jaya to identify all road closures that contributed to traffic congestion and they are given two weeks to do so. Zahid said that the ‘low hanging fruit’ is to immediately reopen roads closed to construction works where some of the roads have been closed for years.

Ultimately, Zahid acknowledged that efficient public transport is the way to solve traffic congestion. Zahid applauded the Transport Ministry for making quick wins in solving the congestion issue without any new money from the Government. Zahid also added that special lanes for buses will be expanded.

Low salary is the reason why non-bumis do not want to join the ArmyArmy Chief General Mohammad Ab Rahman stated that the non-competitive salary structure of the Army, compared to the private companies, is why non-bumiputras are not interested in joining the military. General Mohammad said there are no racial quotas in enlisting individuals into the Army.

Perhaps the military establishment should look at another factor of why people do not want to be a soldier. In Kuantan, the Royal Malaysian Air Force (RMAF) has initiated an internal investigation on the alleged bullying case at its training centre. This follows the police report lodged by the victim’s father.

Homemade bomb sends shockwaves at Old Klang RoadOld Klang Road momentarily turned into a scene in San Andreas of the Grand Theft Auto as the police found three homemade explosives nearby Tiara Mutiara 1 Condominium. The discovery of the remote-controlled Improvised Explosive Devices (IED) was prompted by a minor explosion that led the authorities to swarm into the area. The police are calling for anyone with information regarding this matter to contact any police station nearby.

Business

1. The United States and European Union are pressuring Malaysia to not choose China’s Huawei as the recipient of Malaysia’s 5G roll-out contract as Putrajaya is finalising the review of the 5G roll-out, which initially awarded Swedish Ericsson the USD2.5 bil contract. Huawei has been facing numerous allegations of facilitating foreign espionage but up until today, there is no evidence that the China-based company is doing so.

2. In its continuous move to streamline operations, Axiata Group Bhd has inked an agreement with Indian telco Bharti Airtel Ltd to combine Axiata’s subsidiary, Dialog Axiata Plc, with Airtel’s operations in Sri Lanka.Apart from that, Axiata has also placed its 65% owned subsidiary in Thailand, Suvitech Co Ltd, under voluntary liquidation. The move was done to exit the sub-scale Thailand market and to restructure Axiata Business Services Sdn Bhd (ABS), a wholly owned entity by Axiata Group Bhd, which in return currently holds a 65% stake in Suvitech.

3. Malaysia Digital Economy Corporation (MDEC), an agency under the Ministry of Communications and Digital (KKD), has opened up applications for the three main digital economy grants, namely the Malaysia Digital Catalyst Grant (MDCG), Malaysia Digital X-port Grant (MDXG), Digital Content Grant (DCG). The closing date for the application of the grants is on June 1. More information can be found here. Let’s hope there is a proper audit to ensure no misappropriation of grants to purchase condominiums.

4. AROUND THE WORLD 🌎

Welcome to 2023, where Banning Culture will replace the Cancel Culture

1. Samsung Electronics Co is banning employee use of popular generative artificial intelligence (AI) tools like ChatGPT. This is because some employees were caught uploading sensitive code to ChatGPT. The company is concerned that the information transmitted to AI platforms could be disclosed to other users. It warned that breaking the new policies could result in being fired.

2. As a part of a wider overhaul of Japan’s laws on sex crimes, lawmakers in Japan are introducing the country’s first laws banning the taking of sexually exploitative photos or videos of others without consent, including upskirting and secret filming of sexual acts. It comes after growing public outcry for stronger punishments for lewd acts. Offenders would face imprisonment of up to three years or a fine of up to 3 million Japanese yen (~RM97,700). Before this, such criminal cases had to be prosecuted under local prefecture laws, which vary in scope. In 2021, Japanese police made more than 5,000 arrests for clandestine photography.

3. Down Under says no to recreational vaping. Nicotine vapes require a prescription in Australia, but the industry is poorly regulated and the black market is thriving. Australia Health Minister Mark Butler said there would be a ban on all disposable vapes and a crackdown on the import of non-prescription products. Scripts will be necessary for vaping products that remain legal, and they will be required to have pharmaceutical-like packaging.

All about Artificial Intelligence

1. IBM expects to pause hiring for roles that the company thinks could be replaced with artificial intelligence (AI) in the coming years. Mundane tasks such as providing employment verification letters or moving employees between departments will likely be fully automated, posing threats to jobs in human resources. How many of those jobs? Roughly 7,800, according to its CEO Arvind Krishna.

2. Geoffrey Hinton, widely seen as the godfather of AI, has quit his job at Google and said he regretted his work. Hinton is known for his pioneering research on neural networks and deep learning that has paved the way for current AI systems like ChatGPT. Hinton told the BBC some of the dangers of AI chatbots were “quite scary”. He added that while AI isn’t more intelligent than humans, it soon may be. Chatbots could soon overtake the level of information that a human brain holds. The cognitive psychologist and computer scientist said it is the government's responsibility to ensure AI is developed “with a lot of thought into how to stop it going rogue”.

Shorts

1. Investors and financiers at the Milken Institute Conference think a recession is impending, given that the banking industry will see tighter regulations than before. Compliance with the regulations will further hinder the supply of credit (on top of the Fed’s aggressive interest rate policy) going into the economy, potentially slowing down aggregate demand.

2. Charlie Munger warned of a brewing storm in the US commercial property market. The sidekick to billionaire Warren Buffett said American banks are “full of” bad loans as property prices fall.

3. Core inflation in the Eurozone eased for the first time in 10 months — an increase of 7% from a year ago — still far above the 2% target. With the inflation slowing down, central bankers in Europe may have some wiggle room and opt for a 25 basis points increase in borrowing costs on Thursday instead of 50 basis points. However, they must not forget the ramifications of aggressive interest-rate hiking — look at the US, banks crumbling one after another. 

4. Bloomberg reported that investment bank Morgan Stanley is looking to cut 3,000 jobs from the global workforce by the end of the quarter. The move is to cut costs amid a slump in dealmaking. Not too long ago, in December, Morgan Stanley cut roughly 1,600 jobs, which led to USD133 mil of severance costs in that quarter.

5. FOR YOUR EYES 📺

1. Computing used to be really expensive. 1TB back of storage in 1956 (theoretically possible) cost billions.

2. Why is brain drain a prominent issue in our country? Because of greener pastures on the other side. Case in point — in the US.