Wednesday, January 16, 2013

Contempt of court

Someone asked me if his criticism of the work of the CPIB for a case now being heard in court could be unlawful. I searched for the definition of "contempt of court" and found this explanation:

Contempt of court is a court order which in the context of a court trial or hearing, declares a person or organization to have disobeyed or been disrespectful of the court's authority. Often referred to simply as "contempt," such as a person "held in contempt," it is the judge's strongest power to impose sanctions for acts which disrupt the court's normal process.

A finding of contempt of court may result from a failure to obey a lawful order of a court, showing disrespect for the judge, disruption of the proceedings through poor behaviour, or publication of material deemed likely to jeopardize a fair trial.

To prove contempt, the prosecutor or complainant must prove the four elements of contempt:

- Existence of a lawful order
- The potential contemnor's knowledge of the order
- The potential contemnor's ability to comply
- The potential contemnor's failure to comply

Conclusion: for the act to be unlawful, the court must give an order that the criticism of the CPIB is deemed to be "publication of material deemed likely to jeopardize a fair trial" and, after the order has been given, the party continue to ignore it.

Do you agree with my interpretation?


NotTheTaxMan said...

Dear Mr Tan,

1. "[Payroll tax] will also avoid the add-on effect of GST, i.e. the GST collected at the earlier levels are added to increase the final product cost, i.e. the compounding effect."

With respect, your understanding of GST is incorrect: The credit mechanism (input GST against output GST) only taxes the value-add at each stage of the supply chain. The recipient of supply at each stage of the supply chain will bear the GST on the value-add it receives, for which it will be given a credit against the GST which it will account for on its onward supply. The effect is that the final consumer will bear the GST but only on the total value-add in the supply chain. Which is why it is also known as a value-added tax. There should be no “compounding” effect of what you speak of.

2. Your argument of replacing GST with payroll tax will result in replacing a consumption tax (GST) with a tax on earnings of the working class (payroll tax). However this does not necessarily replace the tax base (assuming that the tax base is essential in the first place which is the basis of your post). The high income group may not even be subsumed under the payroll tax you have envisaged as the high-income earners need not structure their income earnings through payroll.

3. Your argument about payroll tax being administratively easier than GST is vague – do you mean administratively easier for the Government? Because that’s not necessarily true. GST is a self-assessment mechanism. Such a mechanism places the burden on the taxpayer (rather than the Government) to ensure correct assessment and correct payment of tax. But so would the payroll tax as you have proposed.

4. I do accept that GST is regressive. However it is also a powerful alternative to taxing productivity (e.g. payroll tax or income tax). What should be implemented is differing GST rates: lower rates for necessities, and higher rates for luxury items. What the rates should be, and what items should fall within the different categories, should and must be carefully studied. However, broadly underlying that assumption is that people would rationally spend on necessities first, and then, luxury items. In other words, the high luxury GST would ensure that it taxes spending by those with more disposable income. The Government might think this is cumbersome to administer, and may not have the political will to implement this now. However, GST when it was first introduced in 1994 was also considered cumbersome. Look at how far Singapore has gotten today (with Malaysia still struggling to introduce it).

Tan Kin Lian said...

Dear NotTheTaxMan,

I am aware about the value-added nature of GST. I still stand on my statement about the compounding effect of GST because of the psychological effect and also the inability of non-GST registered company to recover their input.

As you are clearly from IRAS or an accounting firm, I suggest that you meet with me to discuss my suggestions and also how to tax earnings, etc.

My email is

You have given the standard arguments in support of GST over the past 15 years. Now it is time for you to look at GST from another angle.

By the way, you have posted your comments in the wrong topic, but we can continue separately outside.

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