Misrule worse than no rule!

Can someone be charged for an offence when at the material time there was no offence?

KUALA LUMPUR: The Federal Territory Islamic Religious Department (Jawi) does not need any court order to seize the book ‘Allah Liberty & Love – Courage To Reconcile Faith & Freedom’ by controversial writer, Irshad Manji, following its contents infringing Islamic laws, said Jawi senior enforcement assistant principal director Wan Jaafar Wan Ahmad.Malaysians Must Know the TRUTH: JAWI DOES NOT NEED COURT ...

NIK Raina Nik Abdul Aziz is accused of committing a crime, the “crime” being the distribution of a book which the Federal Territory Islamic Religious Department (Jawi) does not like.

If the sentence above sounds a bit odd, that is because it is.

Nik Raina is a manager in a bookstore. She is not an owner of a bookstore, she is an employee.

Therefore, she does not have any say with regard to what book is being sold. She just manages the shop, as her job title entails.

Now she is being charged in the Syariah Court for distributing a banned book.

But it is a book, it must be said here, that at the time of the supposed offence was not actually banned.

Therefore, it was not illegal to sell the book at the time.

Jawi raided the shop she was working in on May 23. Copies of the book were confiscated during the raid. The book was effectively deem­ed illegal on June 14.

So, on what grounds was Jawi confiscating the books? It is not based on the law, that is for sure, because no law was passed banning it until 22 days after the raid.

The only reason that can exist is that Jawi disapproved of this book and took it upon itself to take action even though there was no legal ground upon which it could do so. In other words, they didn’t like the book so they decided to raid a shop and take the book.

Does this sound odd to you? Does it sound like the action of a despotic state? It does to me.

How can a person be charged for an offence when at the time of the so-called wrongful act, there was no offence? You can’t possibly do that to a person.

There are constitutional provisions against such things. It is known as protection from retrospective legislation.

In other words, if you decide to make it illegal to wear yellow today, you can’t charge someone for wearing yellow yesterday. To do so would lead to an incredible injustice and the complete breakdown of the rule of law.

Now, because Jawi is an Islamic body, there are some who believe they are above criticism. I beg to differ; it is because they are a religious entity that they must be open to criticism, especially if they behave in a way that is unjust.

This is because as a religious agency they have an even greater responsibility to not tarnish their actions with acts of cruelty, meanness and vindictiveness. For by doing so they demean the very faith that they are supposed to be upholding.

But that is by the by. Any agency, be it religious or secular, has no right to treat people in this way.

They have no right to seize private property on their whim, and they have no right to charge someone for a crime that does not exist.

That is the bottom line. If we allow anyone to do so, we are simply throwing away our democracy and the protection that the rule of law provides us.

Brave New World  By Azmi Sharom

Related articles:

 

Borders allowed to challenge Jawi's seizure of controversial book

Bookstore manager charged with distributing banned book 

Borders wants clear guidelines on banned books

‘Violent lawyer’ may face action

PETALING JAYA: The Bar Council is looking at issuing a show-cause letter to the lawyer who was caught on video pushing and kicking a client.

Bar Council president Lim Chee Wee said that if there was a cause for further action, the lawyer would be referred to the Disciplinary Board.

“The Board (which is independent of the Bar Council) will decide whether to convene a disciplinary committee to investigate further or deal with the matter summarily.

“If convicted, the lawyer can face reprimand, fine, suspension, or be struck off the roll,” he said.

He said this in response to a 9.03-minute video clip on a “hooligan lawyer” that has gone viral.



The video showed two men, believed to be a lawyer and a house buyer, arguing in the presence of three others in an empty house on June 19.

The argument started when the house buyer refused to acknowledge receipt of several documents handed to him by the lawyer.

The lawyer, Tan Hui Chuan, who is a former Selayang municipal councillor, said it was not fair to pre-judge him.

“I am only human. The client bombarded me with hurtful and disrespectful words over and over again.

“I am 58 years old and about to retire. I never had any disciplinary issues before. As all can see, I only pushed him away from me, to make him stop.

“But he went on and on. I raised my hands several times as a sign of surrender but he kept pestering me.

“And yes, I kicked him once. But it was a soft kick,” he said.- The Star

Sources:

http://www.malaysianbar.org.my/

Related posts:
Ethics vital for lawyers! Force to sign documents & hit client?

Lawyer fleeced millions from victims in property scam 

Lawyer to stand trial to settle RM3.9mil claim against land owners

New tax rules create a quandary for lending to family members

CHARGING below market interest gets you in trouble with the taxman or the law against money-lending.

“Neither a borrower nor a lender be”.

This advice by Polonius, the King's adviser to his son in Shakespeare's Hamlet remains good advice today.

But good advice, it is said, is least heeded when most needed.

Lending money gives rise to risk of default, a stark reminder of today's global phenomenon.

At a personal level, it can lead to the loss of a friend, a relative remaining one only by virtue of blood ties.

The term “relative” is defined in our tax law to include a wide network of family members including a nephew, a niece, a cousin and somewhat incredibly “an ancestor or lineal descendant.”

How the latter is to be determined, the law has not made clear, leaving the conundrum perhaps to the wisdom of the courts.

In many cases, loans between family members are below-market loans.

By this is meant that the lender charges either no interest or a rate that is less than the “market rate” also known as the “arm's length” rate.

This is in breach of the tax law, which requires a loan to a related party including a relative to be at the market rate of interest.

This requirement has been made clear by a recent Government Gazette setting out rules on transfer pricing as the rules do not state that such loans must be in the context of carrying on a business or must be used in a business.

Thus when you make a below market loan to a relative, driven entirely by altruistic reasons and devoid of any business considerations, the tax law treats you as having derived imputed' income from your borrower and would proceed to levy tax on that imputed income.

This phantom income on which tax is levied equals the market rate you should have charged less the interest you actually charged.

This means that you must report the imputed interest as taxable income in your tax return failing which you will be in default of the tax law.

If you were to consider avoiding this unfavourable tax outcome by being somewhat hard-hearted and charged interest to your relative, then you are in breach of the Moneylenders Act.

The law here precludes the charging of any interest since you are not a licensed moneylender.

A moneylender under this law is any person who “lends a sum of money to a borrower in consideration of a larger sum being repaid to him”.

So this puts you, the lender, setting out to help a financially distressed relative, on the proverbial “horns of a dilemma”.

You are in the untenable position of breaking one or the other law.

This state of affairs seems to run counter to any coherent tax policy objective.

In the United States, the lending of money below market rate historically occurred without tax consequences.

Through a series of court cases over several years culminating in a case in 1984, the court held that the lender's right to receive interest is a “valuable property right” and where such a right is transferred by way of an interest-free loan, it is in the nature of a gift subject to “gift tax”.

But the point here is that the taxing of the interest-free loan is because of the existence of a gift tax.

We do not have such a tax in Malaysia and taxing imputed interest, as this measure is generally known, between related individuals not conducting business transactions, is a retrograde step.

We had long repealed a similar imputed income provision, which treated a person owning an unoccupied house as having an income source, even where no income exist.

Business related loans follow similar concepts, but here the law is entirely understandable and justified where the intent is to avoid tax.

If company A makes an interest-free loan to its subsidiary which is a tax exempt pioneer company, then this leads to tax results which are not reflective of transactions between commercial parties.

Not charging interest inflates the subsidiary's tax exempt profits enhancing its capacity to pay tax exempt dividends, without a corresponding tax liability on the lending parent had interest been charged.

Here the existence of a “tax shelter” where one entity has either tax exempt status or a tax loss position, can lead to tax leakage, the reason for the arm's length rule.

Interest-free business lending between related companies can also lead to anomalous results.

This is a consequence of the divergence between the tax treatment and the new accounting standards for public listed companies.

The taxman will require tax to be imposed on the lender on the imputed market rate interest.

Whereas if such a company lends RM100,000 to its subsidiary interest - free to be repaid in equal instalment over five years and the market interest rate is 10%, the accounts will reflect the lender as having a debt of RM75,816, which is the discounted amount at the inception of the loan.

Over the period of the loan, the borrower will be shown as having paid interest of RM 24,184 which will equal the discount.

Thus the books of both companies will be recorded as if interest had been paid as shown in the table.

Since these are book entries and there are no costs incurred or income earned, they have no tax consequence.

This reflects the economic substance of the loan transaction as distinct from the strict legal substance, the mainstay for tax.

This fundamental difference in concept tends to make attempts at convergence between the accounting and tax treatments particularly problematic.

The more pressing issue is doing away with the taxing of imputed interest on non-business lending between relatives, a measure which seems unjustified.

Kang Beng Hoe is an executive director of TAXAND MALAYSIA Sdn Bhd, a member firm of TAXAND, the first global organisation of independent tax firms. The views expressed do not necessarily represent those of the firm. Readers should seek specific professional advice before acting on the views. Beng Hoe can be contacted at kbh@taxand.com.my