KUALA LUMPUR, April 7 — Malaysia would have to shut down the Labuan tax haven, another brainchild of Tun Dr Mahathir Mohamad’s, if setting up offshore accounts is considered a crime, Umno minister Datuk Seri Dr Salleh Said Keruak said following uproar here over the Panama Papers leak.
In his latest blog posting, the communications and multimedia minister repeated remarks issued by some of his Cabinet colleagues that tax havens are not illegal but acknowledged that the issue may be one of morality.
“Tax havens in themselves are not illegal. The issue, of course, would be the source of your money and whether you need to hide it because they were ill gotten,” he said.
“I suppose the issue of tax havens is not so much the issue of doing something illegal but more about whether it is moral,” he added.
Salleh then noted that Malaysia is number 12 on a list of 82 tax havens across the world, including among others those in Luxembourg, Hong Kong, Cayman Islands, Singapore, United States, Lebanon, Germany, Jersey and Japan.
“For Malaysia to become number 12 on a list of 82 tax havens, the most crucial element would be banking secrecy and tax savings. This is how they all operate.”
“And if placing money in tax havens were a crime, then Labuan, the brainchild of Tun Dr Mahathir Mohamad, would need to be closed down,” the minister said.
The Panama Papers information leak involves over 11.5 million confidential documents created by Panamanian corporate service provider Mossack Fonseca.
The documents provide detailed information on more than 214,000 offshore companies, the names of their shareholders as well as their directors, which included among them government leaders, their close associates and even close relatives.
Those named in the Panama Papers include individuals from Malaysia, Brazil, China, France, India, Pakistan, the UK, South Africa, Spain, Syria, Russia, Mexico, Argentina and Ukraine.