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Sakmongkol ak 47

ariff.sabri@gmail.com

Monday, 6 October 2014

Maybe we should impose a petrol and diesel tax.




I know minister Ahmad Maslan personally. He is a pleasant fellow on the whole. Most of them are- until they become irrational defenders of their equally irrational leaders.
As a politician however, he can come out with the most madcap of answers. He is to Najib what Sanusi Junid was to Mahathir. 
I wonder what happened to the padi people grew on their rooftops? What happened to all the trained pig-tailed macaques that can climb coconut trees at amazing speed?  There is a high demand for these animals in by coconut growers in Southern Philippines.
Both of them have the same physique coincidentally. You know what they say about not so tall people- they are willing to engage you in physical fights. So I have to be careful with Ahmad Maslan and need to avoid coming in contact with him at parliament lobby. Furthermore he has a CGPA of almost 4. A brilliant fellow. Same class as Tony Pua and Ong Kian Meng.
He is reported to have tweeted about the rise in Ron 95 and diesel. In 2013 as I wrote earlier, he defended the withdrawal of subsidy in the name of subsidy rationalisation because undeserving people were enjoying the benefits of lower fuel prices. The Mercedes Benz owners, the BMW brigade were using RON95 and diesel was being smuggled out of the country. Since he can’t use the same excuses, he has now defended the increase in prices by reminding people that Najib is the onliest PM in our history to have reduced the price of petrol by 90 sen. 
As the late Pak Sako was wont to say- wow! 
Wow indeed because Ahmad Maslan is trying to use a Houdini on us. Remember when Pak Lah raised the price of RON 97 to RM2.70 after raising the price twice before? He introduced a scheme where people queued up at post offices and other paying outlets to get reimbursements or petrol rebates. We have not forgotten that- at least we, the Honda and yamaha cup owners, the lower cc cars don’t forget.
Our Najib did not reduce the price of RON97. The price remained as it was during Pak Lah's time. What he did, or the wily oil companies did was to introduce a lower octane fuel known as RON95. It was priced at RM1.80 then. So from RM2.70 to RM1.80, it was indeed a reduction of 90 sen. But it was a different fuel. It was RON95 not RON97 which Pak Lah raised to RM2.70 per litre.
The price of RON95 since 2009 has now increased to RM2.30. So we can now conclude and tell Ahmad Maslan at the same time, that Najib is the onliest PM to have increased the price of RON95 by 50 sen since 2009!
No, we have not forgotten who did what and when.

Impose a tax on petrol and diesel.
Someone sent me a most practical solution to the petrol and diesel issue. (PnD). Why don’t the government introduce a petrol and diesel (PnD) tax on all private and corporate owned vehicles that are above 1600cc?
In my last article, I said the government do not have any clue how to raise revenue. This is because; they operate from a rent seeker mind-set. Because they own the licenses, monopolies, grants, quota, deciding authority- they are more obsessed with how to extract more and more. So let us propose a moderating solution.
We can agree on one point though- that the target groups ie the lower income people must benefit directly. But by withdrawing subsidy because we want to prevent the undeserving ones from benefiting, we have also caused collateral casualties. We want to punish the better off, but the less off get punished too.
Now Ahmad Maslan is always reminding people that the government is spending around RM21 billion a year on subsidies. By the way- that’s only a fraction of the outflow of illicit money out of Malaysia.
The PnD Tax. Suppose the tax subsidy is retained. Will the government consider imposing a petrol and diesel tax? Essentially we know whom to tax for petrol and diesel- tax the owners of bigger capacity cars and tax the big diesel users.
Let us assume that poorer people like us drive lower cc cars- maybe less than 1500cc. not only the cars use less petrol but also incur lower road tax. The bigger capacity cars- above 1600 are driven by better off owners. So we tax them.  The tax from these, would cover both private and company registered vehicles.
How do we start?  Start by calculating an average annual consumption of petrol and diesel by these vehicle owners. The work to be done by the transport ministry people. Once the average annual consumption is known, that figure can be used as a basis for calculating the proposed petrol and diesel tax. Suppose the government wants to recover RM8 billion- they have to work backwards to arrive at the quantum figure on tax. The proposed tax band would cover vehicles with capacities ranging from 1601-2000, 2001-2500; 2510-3000, 3001 and above.
The government sets a tax rate on these vehicles and collect the taxes at the next road tax renewals. The tax can be collected by JPJ or any other authorised bodies having access to JPJ data base. If MYeg uses this proposal, they would have to pay me.
The PnD tax will also be applied to foreign vehicles. The tax on all incoming vehicles either from Thailand, or Singapore will be paid at our customs offices.
The revenue collected will offset the amount of subsidy given out. The revenue collected from the PnD tax will be credited into a central subsidy management fund controlled of course by the Finance Ministry.
The government has to implement some kind of PnD tax to redistribute real income. The better off with higher capacity cars will have to pay taxes so that they help reduce the subsidy burden of the government Maybe that will reduce the annual RM21 billion on petrol subsidies and we can be shielded from Ahmad Maslan’s annoying parrot calls on how much subsidy this caring government gives out. It has become nauseatingly irritating.

23 comments:

Anonymous,  6 October 2014 at 15:49  

Too simole
If adoptted there goes the feul card.

Anonymous,  6 October 2014 at 16:34  

The Govt should instead introduce a corruption and kickback tax. Since the money will be siphoned away anyway, at least we can get back at least 10% of it.

Brilliant idea?

Anonymous,  6 October 2014 at 17:37  

Points to ponder:-
1.smaller C.C. cars are way more POWERFUL than "older' cars now, turbocharger/supercharger technologies are game changer
2.bigger C.C. cars are paying disproportionately high ROAD TAX, e.g. Viva RM 30,but a 2700cc car pays +/- RM1600 a year.
3. why are some of us especially PENSIONERS who are STUCK with "old" but big capacity cars? We can't even get 1/4 of a Viva even if we want to sell and we have not even talk about the installments.....

Mr Bojangles 6 October 2014 at 18:58  

Don't leave it to the Transport Ministry folk to calculate the average consumption.
Like their boss fella who said that average household income is Rm 5900, these PTD chappies don't know how to math out the numbers. Just as they often don't know the difference between their elbows and asses and end up scrstching the wrong end.
Trust me on this. Govt incompetence as you mentioned earlier is legendary, and the top of the heap, the policy-making PTDs are better at event management and carrying bags.

Anonymous,  6 October 2014 at 18:58  

Anon 17.37 agree with you pensioners have 'old' but big capacity cars and suffer more. But if you link old cars with big capacity with their age, it should work out. For example 2000cc 10-yr old and above, tax less!

bruno 6 October 2014 at 20:29  

Dato,the only smart thing for these gomen bureaucrats if they are true to their words,is to set the fees of road tax based on income or values of the cars.That is the only way to tax the rich and spare the poor.Maybe their family cats and dogs can teach these not to smart guys how to do simple arithmatics.

Anonymous,  7 October 2014 at 07:34  

Datuk Sak

At the same time, action should also be taken on all the cases of corruption and
overcharging of the govt as documented every year in the
Auditor-General's report.
These are huge subsidies for
UMNO Baru/BN-linked cronies.

Furthermore, the tolls and the toll gates on roads in KLang Valley should be abolished. These cause traffic jams and waste fuel e.g. the massive jams at the toll gate near Sunway Medical Centre. Only congestion charges at certain times should be imposed on road users to ensure smoother traffic flow.

Phua Kai Lit

Paul Tan 7 October 2014 at 08:40  

Can we please leave behind this outdated concept of judging a car based on its engine displacement?

It is outdated and irrelevant in this age of turbocharging where even a big Ford Mondeo can come with a 1.0 litre engine.

If you want to classify cars according to rich or poor please consider CO2 emissions or weight instead.

Anonymous,  7 October 2014 at 09:21  

Well, you don’t need to do those calculations to get more revenue (2 billion) or reduce subsidies. The more you calculate, the more man power to pay for the bloated civil servant salary thus increases the expenditure. With 2 million Civil servants (including all the GLC) at 7% of the population, this figure is rank No: 1 in the world.

What you need to do is reduce the cronies benefit like the following:-

1) Abolish the car AP to save 2 billion.

2) Abolish the Rice AP to save 1 billion.

3) Abolish the sugar AP to save 500 million.

4) Open tender to save billions (MRT....etc)

5) Corruption,

6) Illicit fund.

7) Revise the toll rate.

8) Reduce the IPP subsudies....etc.

Don’t give excuses before you remove the above subsidies.
They dare to make the rakyat suffer and dare not make the cronies earn less.

BN boleh. I wonder why the majority dare not take on the street to protest to fight against cronies and 1st class of elite group of people from U...no.

To stop the suffering, only the affected majority to fight them. Otherwise, they will keep suffering under the present regime.

Anonymous,  7 October 2014 at 10:55  

i agree with bruno, road tax should be base at the value of the car for exp a normal man like me who like to travel in conform once a blue moon purch a 20+year 3000cc m.benz around RM 26k have to pay RM 2K+ for road tax same as the person who can afford to pay RM 500k for the same newer model it is fair !!! 1 of my friend who brought a RM 3k proton saga was ask to pay RM 700+ for the insurance. in this case the poor will be make poorer and the rich very happy.
sswong

Anonymous,  7 October 2014 at 11:09  

Hi Sakmongkol AK47,

Check out this article that gives a technical rebuttal to your post, as well as some suggested improvements to your idea:

http://paultan.org/2014/10/07/petrol-and-diesel-fuel-tax-higher-capacity-vehicles/

Anonymous,  7 October 2014 at 12:13  

Those driving WW 1.4 turbo and ford ecoboost 1.0 turbo consider poor people?
No logic right and your proposal dont work.

Abolish the car Tax and let the petrol price follow the market rate like Indo/Thailand.

But in malaysia, they want the tax and provide peanut subsidy for exporting oil country.

They want both.

Anonymous,  7 October 2014 at 13:38  

anon 12:13

you are right. bu what about listing say cars that fall in between 1000-1600 cc as exempt from tax but list to exclude a range of identifiable performance cars?
the idea is to tax the better off and the better off are deemed to use higher capacity cars- so that there is redistribute effect.
btw- is this how you engage in debate? i think the writer meant this as a general framework. the idea to link tax on emission of co2 is more credible and put up in a civilized manner.

Anonymous,  7 October 2014 at 14:20  

Actually the simplest solution is as they always say, the simplest.

1) Drop all car taxes so people can more freely choose that car to buy and use.
2) Drop subsidies, for all that matter, put on GST or whatever fuel tax on it. (now, I realize this will likely not be the most popular notion, and it will be a painful one at that) but bear with me.
3) Drop road tax to a flat yearly flat fee (ie. License Plate Tax – if you may) – I used to only pay about 80.00 per year per car flat fee for any engine size when I had a few cars in Canada. I just throw my insurance around shared with either car during summer car (sports car) or winter car (4WD).

3+1) Let Petrol companies compete for your $$ by opening up pump prices.
Only 3+1 steps.

People can buy as many cars they want and only use those that suits their needs. This is the only true way of self regulating use by demand (by your own wallet). So no more wastages in fuel.

So if I want to burn more fuel in my V8 gas guzzling sports car. I pay for it. No complaints there, and neither should be from anyone else. If I want to be fuel miserly, I drive a small eco hatchback. If I want to ferry my kids in a big safe SUV, so be it. Its my choice.

If I’m a rich bugger that can afford to burn petrol, I shouldn’t need to take flack for wasting subsidies. Neither should I feel to be criticised of trying to be kinder to the environment and save a bit of fuel.

This has an automatic self imposed pressure to reduce consumption and also pressure for automakers to come up with more efficient cars as not having high taxes on cars will also allow people to switch when new technology is available – instead of being stuck on a 20 year old gas guzzling banger. The ROI is more easily achievable.

If the government can do pay per use for highways, why not fuel.

Anonymous,  7 October 2014 at 16:45  

"We can agree on one point though- that the target groups ie the lower income people must benefit directly. But by withdrawing subsidy because we want to prevent the undeserving ones from benefiting, we have also caused collateral casualties. We want to punish the better off, but the less off get punished too."

Dear Datuk,

The above quote is a good example of a dumb strategy. If the better off have diminishing returns on earning more with a lot more taxes levied on them, then what is the incentive for the poor or the average of earning more? To pay more taxes with little benefit?

For your information, not all high income earners are CEOs or even doctors. I personally know of many in my community that work longer hours or do side business to have higher income. They do hard work, are we going to penalize them just because they earn more than the average?

One of them works as an IT services guy in Cyberjaya, he sells fruits during lunch. His wife is not employed, looks after their 4 children and his mother. He also works overtime and only has time with his kids in the weekends. His total gross income is higher than mine, at RM12K on average before taxes and what not. He has to service his housing loan and car loan. They only have one car and one house. He is also saving for his kids education and their insurance. He also pay more taxes than a married couple that are both working and have no kids. Shouldn't we be encouraging him to have some savings for himself and his wife or money for him to further his education, so that he could earn even more? How is he going to do it if we burden him with even more counterproductive taxes? He definitely can't do with a smaller car, are we then going to ask him and his family to take the bus?

Before you go suggesting your colleagues in the govt for being misleading and dumbing down the rakyat, please look into the mirror first. The rakyat did not vote the opposition to maintain the same level of stupidity in govt. We need better ideas, we need to encourage the people to move to greater heights. Not encourage them to be complacent and continue to live in mediocrity.

Anonymous,  7 October 2014 at 21:39  

I suggest for whatever formulae please include directly or indirectly govt owned vehicles. It is time. The rakyat wants the politicians and govt officers to be responsible in spending our money and being accountable for their actions. Thus all travel and transportation expenses can be accounted for. This includes all cabinet ministers and state excos as well. I am flabergasted at no control for them but passing all subsidies cut to the publik/rakyat. They keep spending and spending as though the rakyat are rich and they are the poor side. The rakyat must wake up and tell the govt to stop bullshitting us. This is not politics. Thisbus about survival vs the ever increasing inflationary rates. Figures do notblie but oly if it is generated from those who prepare it using the right and proper formulae to derive the right statistics. Not using false stupid formulae (God knows where they pluck it from) to hoodwink us.

Suci Dalam Debu 7 October 2014 at 22:33  

I always believe that there should be no subsidies in petrol & diesel. That way, smuggling is eliminated.

Then,
1. abolish duties on cars with 1000cc
2. reduce duties on cars with 1300cc
3. "Normal" duties on cars with 1500cc
4. Increase duties on cars > 1600cc
5. Special tax for those >2000cc

With expensive petrol & diesel, people will be more prudent & improves efficiency of usage

Anonymous,  8 October 2014 at 11:36  

Dato

I just read on Malaysiakini that:

"The Agriculture and Agro-based Industry Ministry is prepared to import more necessity goods such as fish, vegetables and meat in efforts to avoid price hikes following the government's move to reduce fuel subsidy recently."

Is this a new economic model that even Nobel Prize economists failed to discover?

Or we really have dumbass in the Agro Ministry?

wawi 8 October 2014 at 22:29  

Tax them based on horse power then

ordinary malaysian,  8 October 2014 at 22:48  

Everything sounds so pat until you come to the collection part.

Computing the average and collecting the tax based on it must necessarily penalise those who do not consume the computed average on any given year.

In the first place, there are bound to be miscalculations in the very act of computing the average. How does one do that in the first place?

Totaling the nations's consumption of PnD for the year and dividing that by the number of vehicles on the road? But how is one to know how much PnD is actually consumed by the higher capacity cars and how much the lower ones? And even among the categories of higher capacity cars?

Unless of course, motorists are required by law to record their consumption.

Or maybe there is indeed an arcane formula somewhere that might come in useful. I can't say, but do so hope because the PnD tax sounds sound; my idea of maths and formulae and their related conjugations, however, extends to only how to add two plus two and does not go beyond that.

Anonymous,  9 October 2014 at 09:13  

The Agriculture and Agro-based Industry Ministry is prepared to import more necessity goods such as fish, vegetables and meat in efforts to avoid price hikes following the government's move to reduce fuel subsidy recently."
----------------------

The above statement is to con the rakyat to accept the price hike and at the same time, tell the rakyat they will check and ensure goods/food will not hike and all money will go for development.

what a joke and these statements has been used for the past 10 years during Badawi's tenure.

The more import make will create more AP to cronies.

This is malaysia boleh land. we have AP for roti(gardenia)/rice/sugar/car/spare part/IPP/toll....etc and now for fish/vegetable/egg.

Anonymous,  9 October 2014 at 13:19  

I do not agree with proposal of having higher tax for vehicle above 2.5.

I use a 2.5 liter pickup truck, because the cost of ownership is low. It doesn't guzzle fuels.

My families are in rural Kedah and Perlis. I covered almost 1500++km each time, balik kampung.

I would only make sense for me to use pickup rather than the Hondas, Protons, Peroduas and etc.

Furthermore, the cars are overpriced due to taxes.

Anonymous,  9 October 2014 at 14:36  

That's the problem in UMNO/BN government leadership. They only select those with limited thinking power or with damaged brain into their rank. Otherwise, they cannot remain in power! For the time being, patriotic Malaysians with brains and thinking power must remain strong and stay united and be ever ready to repair the damaged economy after these dishonest and corrupted politicians gets the boot!

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