Picatho's causeries

Will Finance Ministry license uncertified accountants? This question was raised during 1988 when the Malaysia Institute of Accountants (not the government) conducted raids on those “bogus” accountants by means of Accountants Act 1967 of which they had or exploited a monopoly on a common noun “accountant” as their own brand.

The right of such execution under the Act was somehow jeopardized and was put to a halt by political and public forces.

During that time, Deputy Finance Minister Datuk Loke Yuen Yow was desirous of licensing those “bogus” accountants. As published in The Star on 21 April 1992, he said “The ministry was looking into the possibility of amending the Accountants Act 1967 to accommodate them. We are looking into aspects on how to license them”; he also said “We do not want to be seen as victimising anybody by coming down hard on these accountants”.

After some time, the attempt to amend the Accountants Act by the ministry became sleeveless. The whole issue was then prematurely being submerged and the words of ministry were also being damped into the conner of a drawer.

Maybe the Ministry had aroused to a sense of control or called to a state of preparedness, the Section 153 of the Income Tax Act 1967 was therefore amended by Act 451 of 1991 s23(c), by substituting for the word “accountant” wherever they appear in its subsections with the words “tax agent” on the 14 December 1990.

The amendment means that other then advocates, one must has to obtain a tax agent licence from the Minister if he/she is going to act as a tax agent, a tax consultant or a tax adviser.

MIA was then not to be able to shout again upon the “bugus tax agent”. Even MIA members, irrespective of auditor holders, will have to do so under Section 153(4) of the Income Tax Act 1967. The amendment also deviates the meanings of “tax agent” and “accountant”. A tax agent is therefore unnecessarily be an accountant or vice versa.

Meanwhile the government had successfully taking control of Company's Secretary licences and Tax Agent licences under section 139 of the Companies Act 1965 and section 153 of the Income Tax Act 1967 respectively.

These had nevertheless helped to regulate properly the relevant industries in line with the prospective growth of the economy of country. These had also helped to allow those qualified people especially bumiputra in the opinion of Minister to serve the nation. On top of that, the double or treble standards on the definition of accountants would than be properly relegated and thus eliminating a pride from one particular end.

Did you see many bumiputra accountants and secretaries in public service 15 years ago when these trades were the near preserving trades of Chinese? Today I can find many Malay tax agents and secretaries in my neighborhood.

Although the question of will Finance Ministry license uncertified accountants has not directly been answered but it has indirectly been responded partly because of the amendment of section 153 of the Income Tax Act 1967, section 139(A) of the Companies Act 1965......., and one day, maybe new legislations for auditors will also bear.

Taking into consideration of the harmonization of national accounting profession, the moves are much encoraging. And the indirect re-regulatory job that's propeling by the government is receiving.

It is not my style to engage in personal attacks and Christianity forbids Christian to hurt the feeling of others. I felt pity and sad over a senior citizen at the age of 61 in Ipoh who was charged not long ago because of providing tax agency services without a valid licence. He was charged under the Income Tax Act but not the Accountants Act. Accuses such as bad services, helping clients to evade tax etc. putting on them is rather hypercritical.

What he or she lacks is just a piece of paper and on top of that it is illogical to judge that all the so called uncertified accountants are incapable or unethical.

There is always not an ultimate judgment that qualified accountants are good enough on their works and their own clienteles' taxes are of complete integrity without evasion. A statistical research of this kind has yet to be established and thus it is remained unknown, therefore there is no point to say in such a radical way. Maybe the Income Tax Department can tell the ratio reflecting from the numbers of investigation cases.

I personally welcome the move of Lawatan Audit to be performed by the Tax Authority so that tax payers can be educated to well keep on public rulings and be learned to perform their own tax assessment under STS system and of course leniency and transparency are one of the critical factors to the successful implementation.

Deregulations such as simplified reporting tax return in Hong Kong and other countries where dependency on tax service provider is least possible; An easy and understandable on-line tax filing in US; An Australian Taxation Office (ATO) draft taxation determination allows a person who is not a registered tax agent to give tax advice if it is “part of” another service, are of good values to take into consideration.

As for the case of unlicensed tax agents, the government should in good faith looks into the scenario of how do these unlicensed people exist within the market midst and possibly puts them under the government's supervision or else allows them a grace period to exit from the market or upgrade themselves.

Citizen and Government is just like a son and a father whereas continuous punishing on the son due to his passed mistakes is not a constructive worshiping.

Solutions such as warning and education, plays a vital role in harmonization as well as improvement. I hope the honour Datuk Seri Abdullah Ahmad Badawi's government is approaching to this kind of “son & father” government.

As for MIA now, nothing they can shout again about “bugus accountants” and “bugus tax agents”, as they've been eating their own words. Perhaps one day, they might descend their pace onto the niche of book-keeping and shout again upon“bugus book-keepers”, who knows?