Tax incentive for the strong and wealthy

Lately, in a dynamic effort to win over urban voters who shun gutter politics and are more livelihood issues focus, the prime minister has taken over the role of many top business executives in announcing various private investment initiatives, probably creating the impression that he is the one who got the projects in.

I never see a prime minister of any country announcing private investment initiatives like that (except the much ridiculed Tricubes Berhad). We have business section in newspapers and corporations hire press officers to do this. Even Mahathir did not run to the podium and make himself the unpaid press officer for Berhad this and Berhad that.

Try google up "Najib announce investment" and you will see a great press officer in action.

Anyway what the top does, the lieutenants might follow.


Saturday May 7, 2011
100% tax relief to boost health tourism

KUALA LUMPUR: Private hospitals involved in the healthcare tourism industry will be given 100% tax exemption for several initiatives that they take up.

Health Minister Datuk Seri Liow Tiong Lai said these included the construction of new hospitals and for the expansion, modernisation and refurbishment of existing ones.

He added that the Government was finalising the provision for tax exemption equivalent to 100% of qualifying capital expenditure.

Liow announced this at a press conference after opening HSC Medical Centre here yesterday.

The Government has also made provisions for expenses incurred by private hospitals to obtain domestic or internationally recognised accreditation to be eligible for double deduction incentive under the Income Tax Act 1967.


The thing that put me off is why give tax incentive (read: at the expense of Malaysian tax payers) to wealthy overseas tourists looking for a bargain?

The Malaysian government is actively promoting medical tourism in Malaysia. As a result the number of private hospitals providing quality medical care to international patients has increased over the years. Medical and surgical procedures in Malaysia cost only 20 to 25 percent of the same in USA or UK. The official language of Malaysia is Malay, but English is spoken and understood by a majority of the doctors and health staff. The prices of medical and surgical procedures are a fraction of those in developed countries. For example, a breast enlargement procedure in Malaysia costs around £2,110, whereas in UK it costs between £3,500 and £5,000. Thus, patients achieve a full 50 percent saving. Patients seeking a full facelift including upper and lower eye lid lift, brow lift and neck lift would have to pay out about £2,900 in Malaysia. Whereas in the UK, this procedure would cost between £4,000 and £6,000.

These private hospitals are not exactly struggling to make ends meet. For example, according to the 2009 annual report of KPJ Healthcare Berhad which is owned up almost to 50% by Johor Corporation, the profit numbers and dividends are impressive. Note the effective tax rate is already lower than the statutory rate of 25%. With such profits, do they need more incentive?

Profit has exceeded RM100 million per year while dividends of RM77 million was paid to shareholders.

Johor Corporation, as per their website, stated that

Johor Corporation (JCorp) is a market-driven Johor State Government-linked Corporation. It is to date one of Malaysia’s leading business conglomerates, comprising more than 280 member companies and employing more than 65,000 employees in Malaysia as well as regionally.

Alhamdulillah, the successful growth of the JCorp Group into a sizeable corporate entity that it is today has been fundamentally due to the energy and drive of hundreds of Intrapreneurs throughout the Group, all achieved without any promise of privatisation, stock options, or MBO. JCorp’s Intrapreneurs were energized and driven fundamentally by their higher pursuit for fully translating into reality JCorp’s Business Jihad ideals!

What concerns me is that
1) State government should govern, and stay out of market driving as the role of the government is to regulate, and not profit from what it regulates.

2) Heatlh care should not be privatised. Profiting from a victim of ill health and injuries is immoral and inhumane. It differs little in principle to holding a weaker person in desperate need for ransom. Declaring "business jihad" on our wallets when our loved ones and ourselves are down and suffering, blends painfully with the ever hollow-sounding "rakyat diutamakan" slogan.

By the way, whose political power base is closely link to Johor Corporation?

It seems that economic policies of successive BN administrations have been favouring the strong, e.g. profit guarantees to toll concessionaires, extremely favourable terms to IPPs, approved permits to selected individuals etc.

Looking at the profit and dividend figures sicken me. The middle income group have to bear the extremely high medical cost (recently ING upped my medical insurance premium, citing enormous increase in healthcare cost) while their purchase power takes a battering from raising cost of living (whether due to actual cost increase or market distortion by those sleep-well-at-night speculators). The middle income group choose to go to private hospitals mainly because the service level of public hospital are grossly unsatisfactory. I have some painful personal experience with downright negligent public hospital staff resulting in untold suffering to my family members which I do not wish to share openly.

So, what option does the poor and deprived are left with? I am not talking about those crappy 1Malaysia clinic which at most give band aids and panadols.


According to the whistle-blower, the list of horror stories were endless, but he cited a few examples:

lady in labour is told that she can’t give birth in QEH, while a patient suffering an epileptic fit is whisked away from Likas Hospital to QEH;

child with a broken limb may go to SMC but the surgery can only be done in Likas Hospital;

continuity of care is virtually impossible when patients are moved about every few days;

valuable investigations and data are lost in the process of multiple transfers resulting in costly, repeated tests;

patients who require hospital admission have to be turned away due to the insufficiency of places;

the inpatients meanwhile are packed like sardines in the current wards, with hardly a metre of space between beds. The situation is comparable to a Vietnamese refugee camp, and hospital-acquired infections are the norm rather the exception, as when a patient with tuberculosis coughs his lungs out, everyone in the ward will be inhaling the highly infectious Mycobacterium.

The whistle-blower even claimed that patients have died due to the lack of emergency equipment and the deficient setup at the peripheral wards

Instead of benefiting wealthy tourists who are already benefiting financially, forget about giving them and the profiteers this tax incentive! They are already financially well off. Save the tax incentive and credits for something that truly benefits the rakyat. The 1Malaysia government should look at ways to reduce healthcare costs, increase and improve healthcare options so that Malaysians reeling from 1Malaysia cost of living increase can feel better and safer.

An elected administration has the moral responsibility to ensure its citizens live with dignity and safety.


List of hospital recognised by 1Malaysia government is here.

see if you can recognise the owners.


  1. 2 people I know died in Johor Specialist Hospital recently. One had a bill of almost RM200,000.00 but died anyway. Like someone said, "Doctors cure your ills but kill you with their bills"

    How do you expect your medical insurance premium not to go up. When you say that you will be paying with your medical card, the bill will double up. The private hospitals are fleecing the insurance industry.

  2. Anom, that is what pains me to the core. I overheard my relatives praising a surgeon friend who earns 5 digit a month...gosh, healthcare is not a instrument to rob.

    robbing and killing the individual medically, leaving the grieving family to fend for themselves, is a new form of civilised cruelty that humans have evolved in.

    I hope someone in the MMA read this and your comments very much welcome. I expect a reply stating that it costs their family a bomb for him or her to get the medical qualification hence pay back time in this raising cost of living is natural and expected, right?

    Reading about those world war 2 combat medics pain me even more. There was a Allied medic found dead in Normandy in June 1944. The grave diggers notice he had 4 wounds, 3 were dressed with varying degree of dryness while the 4th wound was fatal. The medic got shot 3 times, silently patch himself up and continue to give aid until he was shot dead finally.

    On Iwo Jima, a great number of Navy Corpsmen got shot and shot again too as they continue to gove aid. Many also dead on that hellish place.

    Today, when I see those indolent, ignorant and indifferent healthcare staff whether in public or private institutions...I seeth quietly. Bless those who do their best. For those who do not deserve to be there, should be taken out and work in some other capacity.