Tax Matters

SUNBIZ (Jan 18) Retail investors in shares, are your gains taxable?

RETAIL investors made big waves on Bursa Malaysia in 2020 and at different times of the year; their participation went up as much as 43% of the daily trading volume. With the rise in the local stock exchange, retail investors made substantial gains last year.

Retail investors are individual, non-professional investors who invest in small amounts of shares from time to time with the objective of selling the shares either in the short term or long term. In majority of the cases, their intention is to build up their capital for retirement purposes, for their children’s education or for their future health needs.

The underlying intention of building up their wealth is to ensure that they have the funds for a rainy day since Malaysia does not have a comprehensive social security net when you are unemployed or retired.

Can the gains be taxed?

In Malaysia, only income is subject to tax. Capital gains on shares are not taxed.

When is the gain income and when is it capital?

Factors such as the intention of the individual retail investor at the time of the purchase, the frequency of the transactions, the holding period and source of funding the transactions will be some of the determining factors in deciding whether the profits are income or capital.

If the investor had bought the share to sell it shortly (say within days or a few months) and the investor regularly buys and sell shares, the gain could be treated as income and taxed accordingly. Financing the shares with borrowings may support speculation and therefore bringing the gains to income tax.

Is profit-seeking motive part an individual’s investment strategy?

If the shares have been bought with an intention to build up an investment, the gains on the realisation of the investment should not be subject to income tax. Individuals should be distinguished from a company because the main reason for an existence of a company is normally to make profits. However, the individual’s intention of trading in shares is usually to build up his capital. Here, the taxpayer has to show that he is attempting to build up his capital over a long term whenever the opportunity arises to realise profits.

What are the tax authorities doing?

There is no specific guidance issued by the Inland Revenue Board on this matter. The underlying basis on whether an individual should be taxed or not is based on case laws. Under the current situation, the taxpayers cannot be certain whether they will be taxed or not.

Generally, the tax authorities have not been taxing individual retail investors on their gains. The exception is when individuals are subjected to tax audits and tax investigations or when they are requested to produce capital statements or net worth statements, the gains from such transactions are usually raised as a matter to be taxed.

The problem is that the isolated individual retail investors selected for scrutiny are subjected to tax while the majority of the individual investors are not subjected to tax on such gains.

Our suggestion

As mentioned above, individual retail investors in the stock market generally tend to invest in the stock market with the intention of building up capital as opposed to benefiting from the short-term gains.

Unless it is evident from the taxpayer’s actions that there is an organised activity to trade in shares to realise gains, individual taxpayers should not be brought to tax on such gains. It is timely for the tax authorities to provide guidance or a public ruling on this matter.

This article was contributed by Thannees Tax Consulting Services managing director SM Thanneermalai.

Financing the purchase of shares with borrowings may support speculation and therefore bringing the gains to income tax. 

Blue Bird

‘Tropical’ bird turns out to be a seagull someone dyed electric blue

Metro UK 14 Sep 2020 – A ‘tropical’ bird with vibrant blue and black feathers fooled people into thinking they had discovered something truly extraordinary. The bird was found wandering a car park in Carlisle by shocked onlookers who alerted the RSPCA. But welfare officers soon confirmed the bird was not tropical and was just a regular seagull that had been dyed electric blue. After trying to clean the blue dye from its feathers, mystery still surrounds what happened to the seagull.

RSPCA officer Graham Carter said he has never seen anything like it in 20 years on the job. He said: ‘We have similar situations before where gulls have got themselves into trouble after falling into containers of beer, curry or oil. ‘We have also seen situations where some birds have been dyed pink before, but we just don’t know what happened in this case with this poor bird. ‘I wonder if some kind of blue powder has fallen on him and left him in this state. We would really like to hear from anyone who knows how this happened.

‘If it’s a case of the bird falling into a liquid or substance we would really like to know so that we can find the source and make sure this doesn’t happen again. ‘Or if it was done on purpose we would really like to know so we can look into this further. At this stage we simply don’t know if this was an accident or malicious.’ Stephen Wakelin, from Wolfwood Wildlife and Dog Rescue, said: ‘We are doing our best for this poor gull and are hoping that he makes a full recovery. ‘We still don’t know what the substance is but we are concerned that it is affecting him as he is a little dazed and is still unable to fly at the moment. ‘We think he is around two years old. It will take some time for him to go back to normal colour as he will have to moult and grow new feathers first. ‘We are doing everything we can for him and making sure he is safe and well looked after.’

A friend to the needy

JOINING the local Caremongering group was an eye-opening experience for Datuk Yasmin Yusuff. It made her realise the complexity of doing charity, and how it has evolved to include more of those who are in dire need, especially during these troubling times.

Her story began during the movement control order (MCO), which started as a two-week lockdown. As it was continually extended, Yasmin took it as an opportunity to do things that she always wanted to do, like gardening, learning to use her digital camera, and cleaning up her study.

“Within a week I got a message enquiring if I was interested in helping needy people, to give out food boxes, and donations. So I donated.

“But a girl at Caremongering asked me: ‘why not join us?’. I asked her if they needed more donations as I could ask friends if they would like to contribute. But, suddenly I became the co-admin of our little group.”

Caremongering is an altruistic movement that started in Canada. Localised and driven on social media, it organically became a global movement to spread good in communities.

“During the MCO, when no one was working, I started asking friends to donate money. And we raised so much money, and they were offering more. So, using the donations, we made food boxes that contain all the essentials.”

Social media activities and communications in Caremongering are divided into two categories: #ISO or ‘In Search Of’, for those who need help, and #Offer, for those who are offering to help.

“We communicate through WhatsApp groups for our ISOs,” said Yasmin.

“For all those who are in need, there is a form where they can register and tell us their details and what are their needs.

“During the MCO, we helped over a thousand families. We also helped large groups of refugees. And I learned so much, I didn’t know we had so many refugees in Malaysia from all over. And that is just in Ampang,” said Yasmin.

Her role at Caremongering was to vet the ISO requests. She had them all laid out on a spreadsheet, sorted by their needs and priorities, and marked if their requests had been addressed. For example, those with infants were attended to first.

“That’s the most mentally and emotionally stressful role. You have to decide who gets help. And people lie and cheat to get what they want, even when they don’t need it.

“In the beginning, I asked: ‘Have you received help?’ and they would say ‘No’ even when they had received help. So I realised that if I changed the phrasing of my question to: ‘When was the last time you received help?’ I would get a different reply,” said Yasmin.

Because there were so many people and organisations helping at the time, including the embassies of foreign countries, they would collate the list of families in need and those whom they had helped before, so that could go further and help more people.

“There are those who ask every organisation that they can for help. I don’t blame them. Previously they might not get responses at all. But for the help to go further, we notify each other when a group or family has received assistance, so we do not overlap.

“Foreigners and refugees who needed help were all daily workers, handymen, and general workers who were not earning much, to begin with,” said Yasmin.

The most frustrating part, however, were encounters with those who did not need help but who lied to get it anyway.

To counteract that, each organisation does its due diligence, keeping records and doing follow-ups, to make sure not only that those who really need help are getting what they need, but also to make sure that help gets to those who are actually in need. This information is then shared with all organisations.

“One of the most wonderful thing about Malaysians is that they don’t take handouts. They don’t want money, they want business. They want us to help them get customers. So we promote them on our digital platforms,” said Yasmin.

Additionally, the organisations also hired these budding entrepreneurs to provide food to help the needy, and even as thank you gifts to each other.

On the other hand, as seen in a recent case, there are also Malaysians who abuse those who are in need, sending lewd and abusive messages to those whose businesses were promoted on digital platforms.

“It is very sad to see this happening. However, this does not discourage victims to continue to empower themselves to become independent,” said the former beauty queen, actress, singer, award-winning radio announcer, voice actor and currently, an emcee.

You can follow Yasmin on Instagram at @yasminyusuff, and if you are looking for an emcee for your next event, do give her a shout. – AZIZUL RAHMAN ISMAIL/THESUN/07 OCT 2020

bin Abdullah

PUTRAJAYA, Feb 13 ― The Federal Court today in a majority ruling ordered for the government to remove the words “bin Abdullah” from a Johor-born illegitimate Muslim child’s name from his birth certificate, but also reversed a previous ruling that allowed the father’s name to be part of the boy’s name. – MMO


An error of judgment?

By Salleh Buang
NST January 10, 2020 @ 12:00am

AS I was about to leave my office in Alor Star on Wednesday, I received a call from a journalist who wanted to know if a conversation between two individuals (A and B) on the phone could be recorded by one of them (B).

My response: yes, if A consents. Alternatively, if there is a court order allowing B to do so. That important rule is grounded on the law of privacy, which is a recognised human right.

In 2010, the Federal Court said in Sivarasa v Badan Peguam Malaysia & Anor that the right to personal liberty includes the “right to privacy”.

The journalist asked whether enforcement authorities (such as the Malaysian Anti-Corruption Commission and police) could listen in and record (wire-tap) private conversations of the public.

I said yes, if there is a court order or if there is a law allowing them to do so.

As a general rule, if evidence is gathered illegally or improperly by the authorities, they would ultimately face a problem when adducing such evidence in court later. The court may rule that the evidence so acquired is inadmissible. Even if the court admits it, there is always the question of how much weight can the court give to such evidence.

Having said that, Wednesday’s disclosure of the audio recordings by MACC surprised me and many of my colleagues. We are puzzled why MACC finds it necessary to make public the present status of its investigations into an ongoing court case. Is it not more prudent to keep secret what and who is currently the subject of its investigation? If MACC intended to build a new case, should it not be kept under wraps first, until all the evidence has been gathered?

Media reports yesterday quoted MACC Chief Commissioner Latheefa Koya that the contents of the recorded conversations were “shocking, sordid and very disturbing”.

When asked whether the disclosure would have any impact on the criminal proceedings against former prime minister Datuk Seri Najib Razak, she said that it was a matter of public interest and involved national security.

She said serious issues had risen from the alleged conversation, including “abuse of power, criminal conspiracy, obstruction of justice, compromising national security, fabrication of false evidence through foreign assistance and connivance”.

I beg to differ. As I see it, the audio recordings raised several questions, such as, who recorded them? Was it an individual acting on his own, or a government official acting under orders? If they were done by a government official, were they made after obtaining a court order, or were they authorised by the public prosecutor? Will these recordings be tendered in court as evidence?

It’s true that law enforcement officers in Malaysia are empowered under several provisions of the law to wiretap conversations of “suspects” pursuant to a criminal investigation. The provisions are provided for under Section 116C of the Criminal Procedure Code (CPC), Section 27A of the Dangerous Drugs Act 1952, section 11 of the Kidnapping Act 1961, Section 43 of the MACC Act 2009, and Section 6 of the Security Offences (Special Measures) Act 2012.

However, it should be mentioned that under section 116C of the CPC, the authority for the police to wiretap a conversation must first be given by the public prosecutor “if he considers it likely to contain any information relating to the commission of an offence”.

Such antecedent permission in the instant audio recording of the alleged conversations is highly unlikely, although I could be wrong.

The disclosure by MACC, I believe, is an error of judgment, especially at a time when the case is ongoing. It may even be subjudice. It would not be a surprise if the person allegedly involved in the conversation in the recording initiated subjudice and contempt proceedings against MACC.

  • The views expressed in this article are the author’s own and do not necessarily reflect those of the New Straits Times


Terengganu man advertises himself with banners in hopes of finding a wife

MMO KUALA LUMPUR, Jan 10 — Noor Aziro bin Abdullah from Marang, Terengganu, has turned more than a few heads after resorting to putting up a couple of banners advertising himself in his search for a wife.

Aziro said that he had put up two banners in Dungun, Terengganu — one in town, and the other at Pantai Teluk Bidara.

The 35-year-old confessed that he has given up searching for a wife through social media because of too much competition and choices that he had to face.

“So I decided to put up a banner of myself, hoping that anyone from the nearby villages would be interested,” he told Malay Mail.

To his surprise, Aziro received numerous calls from strangers asking for the validity of the banner that he put up.

“I’ve received calls from Kedah, KL, Selangor and even Kuantan.

“There’s even a caller from Penang complimenting me about my method of finding a wife and the originality of the idea,” he added.

Aziro has not told any of his family members of his search, and remains hopeful that somebody will be interested in him, saying that he prayed for the best.

Earlier this afternoon, a photo of Aziro’s banner uploaded on Twitter via user @lati0s had caught the attention of social media users.


Cat & Owners

Cancer-stricken woman sues her cat’s new owner for not sleeping with it

Postmedia News (Jan 3) A New York woman with breast cancer, who put her cat up for adoption, is now suing its new owner to get it back for not letting it sleep in the bed, according to the New York Post.

Carol Money, 73, of Brewerton, N.Y., got her cat Lacie as a kitten back in 2009, the paper reported. However, due to her illness, Money decided she needed someone else to take care of the feline.

Money reportedly told Danette Romano, of Syracuse, N.Y., who bought the Norwegian Forest cat from her for US$65 in 2018, that she was putting it up for adoption because of the “distress” the cat experienced from not being able to sleep with her.

In a lawsuit filed in Onondaga Supreme Court in November, Money claimed Romano misled her into thinking the cat would be able to sleep in the bed with its owners, the Post reported.

“(Romano) knew that she would not let Lacie sleep with her at night and purposefully withheld this information from (Money) in order to induce Plaintiff into letting her adopt Lacie,” the complaint reportedly said.

Romano’s husband allegedly admitted to Money about the sleeping arrangements and that spurred Money to call, text and email the woman multiple times about the matter, the court papers said. Money also went over to Romano’s house on Dec. 20, 2018, but the cops were called on her for harassment. She later received a cease-and-desist letter.

Money is suing for multiple claims, including breach of contract, and is seeking unspecified damages.

She also wants Lacie back.

Shocking News

Car falls into sinkhole in Jalan Maharajalela


Twitter pix courtesy of Typical Malaysian

25 NOV 2019 KUALA LUMPUR: A car driven by a woman fell into a sinkhole at Jalan Maharajalela heading towards Jalan Loke Yew here last night.

Kuala Lumpur Traffic Enforcement and Investigation head ACP Zulkefly Yahya said in the incident at about 11.35pm, the victim who was driving a Perodua Myvi found the ground at the location had collapsed causing the car to fall into the giant hole.

According to him, initial investigations found a three square metre hole at the scene.

“The 42-year-old victim was however unhurt,” he said in a statement today.

Zulkefly said the operation to restore the site had been carried out by Kuala Lumpur City Hall this morning. — Bernama

‘The ducks have won’: French court says they may keep on quacking


Nov. 19 DAX, France (Reuters) – The ducks on a small French smallholding may carry on quacking, a French court ruled on Tuesday, rejecting a neighbor’s complaint that the birds’ racket was making their life a misery.

The court in the town of Dax ruled that the noise from the flock of around 60 ducks and geese kept by retired farmer Dominique Douthe in the foothills of the Pyrenees, southwestern France, was within acceptable limits, broadcaster France 3 said.

“The ducks have won,” Douthe told Reuters after the court decision. “I’m very happy because I didn’t want to slaughter my ducks.”

The complaint was brought by Douthe’s neighbor who moved from the city around a year ago into a property about 50 meters (yards) away from the enclosure in the Soustons district where Douthe keeps her flock.

The dispute is the latest in a series of court cases that have pitted the traditional way of life in rural France against modern values which, country-dwellers say, are creeping in from the city.

In a court ruling in September, a rooster named Maurice was allowed to continue his dawn crowing, despite complaints from neighbors who had also moved in from the city.

The neighbor in Soustons, about 700 km (430 miles) south-west of Paris, who filed the complaint about the quacking has not been publicly identified.

The neighbor’s lawyer said the noise exceeded permissible levels, and prevented the plaintiff enjoying their garden or sleeping with their house windows open.

The neighbor had asked for immediate steps to reduce the noise, and for 3,500 euros in damages, according to French media reports.

Dubai bar offering women free drinks based on their weight

Nov. 18 (UPI) — A Dubai bar is drawing in female customers with an unusual promotion — the more they weigh, the more free drinks they receive.

The Fusion Club at Cassells Al Barsha Hotel announced it will be running a special through the end of the year offering $0.12 in free drink credit for every pound a female customer weighs — meaning a woman weighing 150 pounds would receive about $18.50 worth of free drinks.

Bar managers said there is a scale available in the bar, but customers can also use the honor system to merely tell their weight to bartenders.

“Although we have a weighing machine at the bar entrance, we do not insist our guests to verify the weight,” Anil Kumar, the hotel’s food and beverage manager, told Insider.

“We believe in the magnanimity of our lady guests,” he said. “They can just write the weight on a paper and give it to the bartender discreetly, and enjoy drinks equal to the value they wrote on the paper. Very simple, no strings attached.”

The promotion’s motto is, “It’s good to gain weight.”