The Pandora Papers revealed that there was a RM900 billion outflow from Malaysia to tax havens. According to the 2015 Global Financial Integrity (GFI) report, Malaysia had lost an accumulated amount of RM1.67 trillion in the period 2004-2013, an average of RM167.4 billion per year.
The two different sums were based on two different data used by GFI in its report titled Illicit Financial Flows to and from 148 Developing Countries: 2006-2015 released yesterday. The first was according to the United Nations while the higher amount was based on the International Monetary Fund.
In its previous 10-year report, GFI said Malaysia lost up to about US$431 billion (RM1.8 trillion) in illegal flow of money between 2005 and 2014.
According to the report by Global Financial Integrity, the developing countries with the largest value gaps identified in trade with 36 advanced economies in 2018 are China (US$305 bil), Poland (US$62.3 bil), India (US$38.9 bil), Russia (US$32.6 bil) and Malaysia (US$30.7 bil).
Malaysia lost between US$22.9 bil (RM94.22 bil) and US$33.7 bil (RM138.66 bil) in illicit capital outflows from 2006 until 2015. Malaysia lost up to about US$431 bil (RM1.8 tril) in illegal flow of money between 2005 and 2014.
In conclusion, Malaysia possibly has the highest illicit capital outflows per capita in the world, leading to massive amounts of government revenue losses due to tax evasion that could have been used to promote our education system and Technical and Vocational Education and Training (TVET) to upgrade our workforce’s skill, increase workers’ productivity and earning capacity.
Malaysia’s civil society should be more proactive in pursuing illicit capital outflow issue that is closely related to corruption.
The national debt, including liabilities, has hit RM1.5 trillion and needs to be urgently addressed, according to Prime Minister Datuk Seri Anwar Ibrahim.
Anwar, who is also Finance Minister, said the country’s economic position is still not strong and also affected by external developments.
The challenge (for the government) is that the national debt has reached almost RM1.2 trillion. If liabilities are included, the figure has hit RM1.5 trillion