Malaysia Commmitted To Internationally-agreed Tax Standards

By Sunday April 5th, 2009 No Comments

KUALA LUMPUR, April 3 (Bernama) — Malaysia is committed to internationally-agreed tax standards in practice and should not be categorised under jurisdictions that are not, Prime Minister Datuk Seri Najib Tun Razak said Friday.

Malaysia had in fact sent a statement earlier this week to the Organisation for Economic Cooperation and Development (OECD) leaders, to reaffirm its commitment in subscribing to the OECD standard for the effective exchange of information (EOI).

Najib, who is also Finance Minister, was responding to a report that Malaysia and its offshore jurisdiction, the Labuan International Business and Financial Centre (IBFC), had been identified as being among “jurisdictions which were not committed to the internationally-agreed tax standards” following the recent G20 summit in Paris.

“We should not be in that category as in practice, we have been committed to the OECD requirements. Our statement to the OECD leaders earlier this week was to re-affirm this.

“I understand that the list is a progress or status report of jurisdictions which were not committed to the internationally-agreed tax standards,” he said in a statement, his first, as the Prime Minister.

Najib was sworn in as Malaysia’s sixth Prime Minister today, taking over from Tun Abdullah Ahmad Badawi.

Najib also clarified that Labuan had never been on any list of “tax havens” issued by the OECD and Malaysia had always been cooperating with competent authorities.

“At all times, the Labuan IBFC, the Labuan Offshore Financial Services Authority (LOFSA) and Malaysian authorities have been cooperating with competent authorities from other countries on tax matters and financial crime, particularly money laundering.

“Our commitment is further evident from the on-going efforts to tighten provisions of the EOI which are already in keeping with OECD requirements,” said Najib.

“Certainly, we expect the OECD to amend the list to put us in the category of jurisdictions that have committed to the internationally agreed tax standard,” he added.

LOFSA also said in the statement that it welcomed the approach by the G20 and OECD to take measures to stamp out tax evasion.

LOFSA said since its inception, the jurisdiction had met the highest international standards and had received positive assessments by the International Monetary Fund (IMF) under its Offshore Financial Sector Assessment Programme.

In addition, the Labuan IBFC has been affirmed as a “low-risk” jurisdiction for money laundering by the Asia Pacific Group on Money Laundering which is a division of the Financial Action Task Force and an associate body of the OECD.

LOFSA said existing EOI provisions have already met OECD requirements. Efforts were also being taken to further tighten them through the legislative process, it added.

Malaysia, as the world’s 19th largest trading nation, has double-taxation agreements with 69 countries.

These agreements have specific terms on the EOI which were in fact drafted by OECD.

These terms commit Malaysia to cooperating with regulators to eradicate tax evasion.

Malaysia, the Phillipines, Uruguay and Costa Rica were blacklisted as uncooperative tax havens with G-20 leaders declaring the age of banking secrecy was over.

The G-20 leaders also said they no longer tolerated shady havens draining away badly needed tax revenue.

Source : Bernama

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