Will retail giants outsmart the online sales tax?

When I worked in the Malaysian capital of Kuala Lumpur long ago, my office looked across Jalan Tun Razak, a boulevard named in honour of the country’s second prime minister and ‘father of development’. This week his son Najib Razak, its sixth prime minister (2009-2018), was convicted of charges relating to the disappearance of $4.5 billion from a sovereign wealth fund called 1MDB which he once controlled. More trials await, but 1MDB may go down not only as the world’s biggest corruption scandal but also the most vulgar — proceeds that might have helped Malaysia’s poor having been frittered on private jets, penthouses, parties in Las Vegas and the financing of The Wolf of Wall Street.

The alleged mastermind of all this, the financier Jho Low by whom Najib claims to have been misled, is still at large. But Goldman Sachs, which reaped $600 million in fees for managing 1MDB’s bond issues, has extricated itself from potential charges by paying $2.5 billion and guaranteeing recoveries of $1.4 billion. Many other reputable banks and professionals as well as Hollywood celebs overcame any doubts they may have had to sup with Jho Low and help shuffle or spend the 1MDB loot — and if you want the whole story, read Billion Dollar Whale by Tom Wright and Bradley Hope. It’s an absolute shocker. ‘There are important lessons to be learned… and we must be self-critical to ensure that we only improve from the experience,’ said a Goldman spokesman. The first lesson, I fear, is that easy access to giant sums of other people’s money is an overwhelming temptation.

A tax on big boxes

Rishi Sunak is contemplating a 2 per cent tax on goods sold online, possibly combined with a ‘green’ levy on delivery vans and a radical review of business rates, all designed to improve the survival chances of high-street retailers while harvesting more revenue from online sellers who have boomed during lockdown.