☕️ Tax dodgers evaded RM6.34 bil in taxes last year

1. MARKET SUMMARY 📈

A crucial week ahead for the economy as major central banks including the US Federal Reserve and the Bank of Japan involving half of the global economy will decide on interest rate directions.

2. NUMBERS AT A GLANCE 🔢

Methane, known as a potent greenhouse gas, carries more than 80 times (?!) the warming impact of carbon dioxide over a 20-year period and currently contributes to nearly 45% of global warming. Man-made methane emissions represent a significant challenge in combating climate change. Despite its relatively short lifespan in the atmosphere, controlling methane emissions presents a critical opportunity for swift progress in mitigating climate change impacts. A viable target for methane emissions is an intensity level below 0.2% of total marketed gas by 2030, a standard already achieved by leading oil majors. Some 50 oil and gas companies that account for 40% of the global oil production have agreed to play their role in meeting the target.

In 2023, the Human Resources Development Corp (HRD Corp) achieved a new milestone in levy collection, totalling RM2.2 bil, surpassing its previous record of RM1.81 bil in 2022. Additionally, HRD Corp approved over 2.2 mil training positions to enhance the skills and capabilities of the country's workforce. How does HRD collect the levy? The levy is collected from registered employers with 10 or more local staff and is set at 1% of the monthly wage of their employees. In return, these employers receive financial assistance from the HRD levy for the training and development of their local staff, fostering growth and productivity in the workforce.

Tax dodgers attempted to evade a substantial sum totalling RM6.34 bil last year, exceeding the development expenditures of significant ministries like Health, Education, or Home. The Inland Revenue Board (LHDN) detected this amount across 137,453 cases of non-compliance with tax obligations in 2023. The majority of the owed amount, about RM4.2 bil or 66.3% of the total, stemmed from companies. Salaried workers accounted for the second-largest portion of overdue taxes at 23.4%, amounting to RM1.48 bil. Additionally, an estimated RM70 bil is lost to the shadow economy, encompassing illegal businesses and cash transactions, exacerbating the issue further.

3. IN MALAYSIA 🇲🇾

Public servants alleged misbehaviours

1. The Health Ministry has launched a probe in response to the allegations that a senior doctor at Raja Permaisuri Bainun Hospital (HRPB) in Ipoh, Perak has sexually harassed his junior staff members, commonly known as housemen. The allegations were made public after an anonymous letter depicting the allegations was found at the hospital car park by the public. According to the letter, it was claimed that the senior doctor abused his position to be alone with the female housemen and used the time to touch their body parts or lewd talk. This sexual harassment allegation in Ipoh led to the Health Ministry being confronted with a double whammy last week. The ministry also received a similar complaint at the Tuanku Ja’afar Hospital (HTJ) in Seremban. In relation to the case in Ipoh, a 43-year-old doctor has lodged a police report regarding the letter that has gone viral defaming him.

2. A 36-year-old former army corporal, Mohd Amanah Habhijullah, is facing 17 counts of allegedly outraging the modesty of a 20-year-old male soldier and injuring him at Terenak Camp in Malacca. If found guilty, he could be imprisoned for up to 10 years and a fine, whipping or any of the two punishments.

3. ‘You touch, you go’ — warned Education Minister Fadhlina Sidek towards teachers involved in sexual harassment offences against school students. Fadhlina said that her ministry works very hard to create the safest possible school environment for students. In line with that, the Education Ministry has introduced the Safe Schools Program, which includes implementing special guidelines for sports activities and the addition of more counsellors to deal with cases of sexual harassment, if any.

Malaysia may be a transit hub for drug smuggling activities
Inspector-General of Police (IGP) Razarudin Husain hinted that Malaysia is not a drug-producing country but could be a transit hub for drug smuggling activities. According to Razarudin, the police uncovered about 20 small-scale drug labs last year, which only had enough capacity to produce drugs for the domestic market. However, he did not dismiss the possibility that drugs from the Golden Triangle may flow into our country via the Thailand border and pivoted towards other countries, such as Australia, New Zealand and South Korea, from Malaysia. The Golden Triangle is an opium-producing region where the borders of Laos, Thailand and Myanmar meet (see here on map).

Although Malaysia may not be a drug-producing country, drug-related activities sure have a significant black market. According to Home Minister Saifuddin Nasution Ismail, Malaysia has seized properties worth up to RM990 mil that were related to drug crimes since 2019. To give you an illustration of how big is RM990 mil, it is more than what Mynews Holdings Bhd generated in revenue for FY2022. During that period, Mynews recorded a revenue of RM631.3 mil.

Malaysian Bar to challenge Najib’s jail reduction
In the Malaysian Bar’s annual general meeting (AGM), they agreed to challenge the Pardons Board’s decision to reduce Najib Razak’s jail term over his conviction in the SRC International case. The Bar’s former president, Zainur Zakaria, brought forward the motion. Zainur’s motion was on the basis that the Pardons Board had ‘acted ultra vires (beyond one's legal power or authority) under Article 42 of the Federal Constitution to reduce Najib’s 12-year jail sentence to six years and reduce the RM210 mil fine to RM50 mil’.

The Malaysian Bar’s decision has prompted a response from UMNO supreme council member Dr Puad Zarkashi, who accused the Malaysian Bar of not being impartial, always being biased, and playing politics. Puad added that the Bar still stayed idle on other controversial cases, such as Tommy Thomas's decision to drop the corruption case against Lim Guan Eng.

Putrajaya to study the possibility of allowing refugees to work
Home Minister Saifuddin Nasution Ismail said that the Government is in the midst of starting a detailed study that will pave the way for refugees to work in certain sectors. At the moment, the Home Ministry is working with the United Nations High Commissioner for Refugees (UNHCR) to collect data in order to map out where the refugees are. Then, the refugees will be matched with available jobs, particularly in selected sectors such as agriculture and plantation.

The idea of allowing refugees to work is not a new thing. Then Human Resources M Kulasegaran stated that refugees already in Malaysia should be allowed to work as an alternative to hiring new migrant workers. This is a step in the right direction. Refugees should have the avenue to earn a living and subsequently be mandated to pay taxes. We need to accept the fact that they are here, so we need to just make the best out of the situation. All of us are once a migrant if we really trace back our family tree.

Petronas paid RM40 bil in dividends to the government in 2023
Petroliam Nasional Bhd (Petronas) has recorded a net profit of RM16.6 bil in 4QFY2023, a 32% drop from RM24.4 bil posted the previous year. The state-owned company attributed the negative performance due to lower average realised prices. As a result, Petronas only paid an RM40 bil dividend to the Government, down from RM50 bil paid in FY2022. For FY2024, Petronas’ board had approved a dividend payout of RM32 bil. Petronas also confirmed that it is scaling down its operations in Mexico by exiting eight offshore exploration blocks there. However, the oil major stopped short of indicating that they had exited Mexico fully. Read Petronas’ announcement here.

4. AROUND THE WORLD 🌎

US TikTok ban saga - shooting itself in the foot and the US hypocrisy
The US is so eager to ban* TikTok that the proposal was approved by the House of Representatives just eight days after it was introduced. The proposal is still pending approval from the Senate, with some of its members expressing their desire to take their time to evaluate it. Perhaps they might or (more likely) might not have considered the economic and political fallout. 
* Although commonly referred to as a ‘ban’, the proposal would force TikTok parent ByteDance to divest its stake in TikTok within 180 days, or apps developed by ByteDance would be made illegal to distribute.

On the homefront, banning TikTok could rob Biden’s own re-election campaign of a platform that he and his fellow Democrats rely on to reach younger voters. Roughly 60% of TikTok’s regular US news consumers are Democrats or Democrat-leaning, according to a 2023 study by the Pew Research Centre. Further from home, if this ban goes through, American companies, especially Apple and Tesla, will feel the economic pain of potential China’s retaliation. Both companies generate tens of billions of dollars of revenue from China - 18% for the case of Apple and 23% for Tesla. Other companies that drive significant revenue from China include Wynn Resorts, Qualcomm and Texas Instruments. 

How big is TikTok in the US?
China’s ByteDance posted revenue of about USD16 bil last year in the US, about 13.3% of its USD120 bil revenue in 2023, which was up 40% year-on-year. China’s ByteDance, which also owns China’s version of TikTok, Douyin, is on track to overtake Facebook's parent Meta Platforms as the world’s largest social media company in terms of revenue. Meta’s 2023 revenue rose 16% to USD134.9 bil, with its current market cap standing at USD1.23 tril. 

The US hypocrisy
It’s understandable why the US is reacting in such a manner after having experienced Russia meddling with its elections in 2016 through Facebook and now fearing the Chinese government would spy on US citizens and influence them via TikTok. This TikTok ban was initiated during the Trump era. Ironically, Donald Trump adopted the same playbook by authorising a CIA operation in 2019 to discredit the Chinese government on social media, Reuters reported, citing three former officials it spoke with.

Tim Cook’s comment cost Apple USD490 mil in a lawsuit
Apple has agreed to pay USD490 mil to settle a class-action lawsuit that alleged Apple CEO Tim Cook defrauded shareholders by concealing falling demand for iPhones in China. On 1 Nov 2018, Tim Cook told analysts that although it faced sales pressure in major markets such as Brazil, India, Russia and Turkey, where currencies had weakened, he “would not put China in that category”. A few days later, Apple told suppliers to curb production and on 2 Jan 2019, Apple slashed its quarterly revenue forecast by up to USD9 bil, blaming US-China trade tensions, leading to its share price falling by 10% the next day, wiping out USD74 bil in market value. 

Apple denied liability but settled the lawsuit to avoid the cost and distraction of litigation.  The settlement covers investors who bought Apple shares in the two months between Cook’s comments and its revenue forecast. Not only would the shareholders would walk away smiling, but the lawyers too as they may seek fees of up to 25% of the settlement amount - that’s USD122.5 mil!

Thailand’s on-and-off casino dream
Thailand will once more consider legalising casinos to draw investments and tourism dollars. A study was submitted on Friday to the Parliament for approval on Mar 28, though past proposals have been losing bets due to public disapproval. The previous parliament approved a similar study last year, but the house was dissolved to make way for the election before the cabinet could consider it.

The only gambling allowed thus far in Thailand is on state-controlled horse races and lottery. The study by a 60-member committee of government and opposition lawmakers found that at least 10% of Thais are addicted to gambling (Thailand’s population: 71.8 mil). A 2021 opinion poll found that 46.51% opposed legalised gambling due to moral and crime concerns, whilst 21.25% were supportive. 

Shorts

1. McDonald’s global outage - technical error or cyberattack ‘boycott’?
   The fast-food giant suffered system failures on Friday in several countries resulting in failures at its restaurants to take orders and were shuttered for a few hours. Countries affected include the UK, Australia and Japan. The company stressed that the issue was not caused by a cyberattack and was instead caused by a third-party provider during a “configuration change”. 

2. Squid Game star found guilty of sexual misconduct

   Actor O Yeong-su, who played the oldest participant in Netflix hit Squid Game, has been given an eight-month suspended prison sentence for sexual misconduct by a court in South Korea and was also ordered to attend classes on sexual violence. O denied the claims and will appeal the verdict. The assault took place in 2017 when he was staying in a rural area for a theatre performance and allegedly hugged a woman and kissed her on the cheek against her will, O became the first South Korean actor to win a Golden Globe for his role in Squid Game. 

3. Australia’s Foreign Minister weds longtime partner
   Penny Wong, the country’s first openly gay female parliamentarian, married her partner, Sophie Allouache. Penny was born in Sabah, Malaysia, and moved to Australia when she was 8. She’s also the first Asian-born person to hold an Australian Cabinet position. Same-sex marriage became legal in Australia in 2017, a watershed moment for the country where homosexuality was not decriminalised in all states until 1997.

5. FOR YOUR EYES 📺

1. The topic of Taylor Swift found its way into the Parliament. A hilarious moment when Deputy Speaker Ramli Mohd Nor misheard Fahmi Fadzil pronouncing “Swifties”, innocently asking, “YB, striptease?”.

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2. Kitchen hacks that we wish we would have known earlier to make our lives easier. The creator’s reaction to each hack made it even more entertaining.

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3. For the second time this year, Google published an inaccurate USDMYR exchange rate of RM4.98 on Friday. The first misreporting occurred on 6 Feb 2024. BNM said it would seek an explanation from Google as to how the inaccurate reporting occurred and the corrective measures in place. Or, Google is just simply ahead of time foretelling the nation’s systemic decline