Wednesday, October 6, 2010

Haram Money in Penang

Penang & Haram Money

Recently there was some dispute about the issue of Haram Money in Penang state. Some senior citizen who received money from the state's Senior Citizen Appreciation Programme have returned the money, accusing the money was obtained from the racing activities of Penang Turf Club.
The newspaper from New Strait Time reported the following on 2-10-2010:-

GEORGE TOWN: Another 70 senior citizens from Bayan Baru here have decided to give back the RM100 reward they received from the state government as they feared that the money could have come from gaming activities.
Habsah Said, 81, from Permatang Damar Laut, said she was very disappointed and shocked to discover that the money for the state's Senior Citizen Appreciation Programme was obtained from the racing activities of Penang Turf Club.

"For Muslims, we are not allowed to receive money from forbidden sources and it is considered as "duit haram", which all of us have decided to return," she said at a press conference call by Bayan Baru Umno division chief Datuk Abdul Rahim Saibu here today.

She said she had accepted the money earlier because she thought it was "halal" (permitted by Islam). Another senior citizen Zainab Abu Bakar, 67, from Kampung Melayu, said she decided to return the money voluntarily back the the state government for the same reasons.
Earlier, some 50 senior citizen had opted to give the money to Umno Bayan Baru before it was returned to the state government while another 20 of them turn up later to do so the same. –
(source: Bernama)

Is it true that the money is from non-Halal source?

Government Revenue

How did federal government and state government derived their revenue to support their government expenditure budget(or public expenditure budget)? . Government revenue or Government income is revenue received by a government to meet their expenditure. Government revenue may be from various taxes, direct or indirect; non tax revenue from businesses owned by government owned corporations and investment revenue from sovereign wealth funds, fees and licenses collected, and donation from the public.

The tax income source of government revenue may be derived from sin tax or sumptuary taxes.
Wikipedia stated that “ A sin tax is a kind of sumptuary tax: a tax specifically levied on certain generally socially proscribed goods and services”. These goods are usually alcohol and tobacco, but also include candies, soft drinks and coffee, while services range from prostitution to gambling. Sumptuary taxes are ostensibly used for reducing transactions involving something that the society considers unwanted, and is thus a kind of sumptuary law. Sin tax is used for taxes on activities that are considered socially undesireable. Common targets of sumptuary taxes are alcohol and tobacco, gambling, and vehicles emitting excessive pollutants. Sumptuary tax on sugar and soft drinks has also been suggested [1]. Some jurisdictions have also levied taxes on illegal drugs such as cocaine and marijuana.
The revenue generated by sin taxes is sometimes used for special projects, but might also be used in the ordinary budget. American cities and counties have used them to pay for stadiums, while in Sweden the tax for gambling is used for helping people with gambling problems. Acceptance of sumptuary taxes may be greater than income tax or sales tax.
(source: Wikipedia)

Haram & Halal

Then what is haram money? To understand that we must know the difference between Haraam and Halal according to Islamic law.

Haraam (Arabic: حرام‎) (often Haram) is an Arabic term meaning "forbidden". In Islam it is used to refer to anything that is prohibited by the faith or considered as an improper or illegitimate way in Islamic faith. It not only apply to food , Haraam also applies to ill-gotten wealth obtained through sin. Examples include money earned through cheating, stealing, corruption, murder or any means that involves harm to another human being. It is prohibited in Islam for a true Muslim to profit from such Haraam actions. Any believer who benefits from or lives off wealth obtained through Haraam is a sinner.

Halal (Arabic:حلال, ḥalāl; means lawful or legal) is a term designating any object or an action which is permissible to use or engage in, according to Islamic law. It is the opposite of haraam. The term is used to designate food seen as permissible according to Islamic law (Sharia, الشريعة الإسلامية). As with haraam, it can also use for wealth , obtained from allowed sources from Islamic Law.
(source: wikipedia)

A Muslim cannot take nor do something that is considered an improper or illegitimate way. There will be sins doing something that is considered Haram and definitely will be no virtues. For "Makruh", it basically means "disliked" and it simply means that when a Muslim does, or consumes something, there won't be any sin nor virtue for him or her but is advised not to do so. The last one is the "Sunah", a Muslim will get a virtue for doing or consuming something that is considered Sunah but if he or she does not do it, there won't be any sins or any virtues.

So Haram money is money derived from haraam source or non-Halal source, or sinful sources, like corruption, sinful activities, gambling, pork farm, alcohol or tobacco business. For tobacco, there is still debate. The money from haraam sources, will be rejected by the people of Muslim faith.

Malaysian need to understand that most of the Haram money, is also not accepted and not allow by other religion faith. They have in fact common value. Whatever is Haram is also haram or not allow by other religion. The only difference is that there is no strictly imposed law to prohibit the acceptance of the money, there is freedom of choice to accept it.

Penang State Revenue, Federal Revenue and the dilemma

(i) State Government
Chief Minister Lim Guan Eng says Auditor General's report shows that for the first time ever, the state's revenue have breached the RM 1 billion mark in 2009. Income Tax from individual and corporation are revenue for the federal government, so there is no way Penang state derive their revenue from sin taxes or Haraam income. Most of the state revenue is halal.
The only possible one is the donation from companies involved in gambling and alcohol businesses. The money from the Haram source or non-Halal source should not be used in public infrastructure used by the people which include Muslim citizen, it can only be used for Non-Muslim citizen. A responsible state government will respect the faith of the people. Non-Halal fund or income can be used for social institution/charitable institution that accept the fund. For donation it is easy to separate it, unlike tax revenue , the donation is normally is one –off and not continual. The donation can easily allot to specific fund for non- Muslim usage. The state government should publicly disclosed the availability of Non-Halal fund, confirmed by external auditor that the source of the fund is non-Halal, and not use for expenditure involved with Muslim people. A proper disclosure will avoid the communication problem and politically motivated accusations. That should not have problem for state government.
Moreover, Penang state councillor for religious affairs, domestic trade and consumer affairs, Abdul Malik Kassim is in the state cabinet , being a Muslim himself, he will be involved in the matter concerning Muslim affairs. The citizen of Penang should be of comfort that the issue of Haram money will be properly handled by the said state councilor.
PENANG'S state halal agency, PIHH Development Sdn Bhd (Halal Penang) has been set up to develop halal business hub in the state. An Halal industrial Park has been developed by the state halal agency. Located in Bukit Minyak with a land size of 52.65ha the Penang Halal Industrial Park has so far attracted RM150 million in investment from a Chinese marine biotechnology company. The company will hold its groundbreaking before the end of the year. Three other projects that are in the midst of being finalised at the Penang Halal Industrial Park are a gelatin project with an Iranian group, an Australian group who wants to produce containers using organic products, and a biotechnology group from India.(source: NST dated Jun 22, 2010).
This indicated that the state is fully aware of the issue of Halal and Haram in Muslim faith.
(ii) Majlis Perbandaran Pulau Pinang (MPPP)
The Municipal Council of Penang Island or Majlis Perbandaran Pulau Pinang (MPPP) is a local authority which administers Penang Island. This agency is under Penang state government. MPPP are responsible for public health and sanitation, waste removal and management, town planning, environmental protection and building control, social and economic development and general maintenance functions of urban infrastructure. The MPPP can only derived revenue from fee and assessment from the activities undertaken by them. The only possible of haram income are fee or license collected from gambling outlet or pork business, but it is collected for the services rendered, and not consider as Haram or Non-Halal. There is no problem of Haram Money.
(iii) Federal Government
Federal government however have some of their revenue from gambling tax, from companies like Genting, Sport Toto etc, and company tax from alcohol or gambling businesses. A responsible federal government will need to split their revenue into Halal income and Haraam income, since the majority of the citizen of the country is from people of Islamic faith. The fund from the Haraam income should be separated and use only in the sector that accepted the fund. It is fair to the citizen of the Islamic faith that the fund should not be used to the area that directly affected them in their daily living. The federal government is facing the problem of the separation of Haram revenue, as sin taxes are a continue sources. Federal government need to disclose the source and how the fund are used.
The issue of the Haram money; the ball is now with the federal government to meet the request of the people, as advocate by the opposition party in Penang(from their own party)……..

Then, why wait.....for the benefit of citizen from Muslim faith.

What are the feedback from public

1. From Thomas Lee
The Penang state government has acknowledged receiving RM500,000 from the Penang Turf Club, but said the money would be used to help poor non-Muslims.
Certainly, due respect must be given to our Muslim friends whose religious conscience does not permit them to accept money originated from non-halal source, but the unwitting and inadvertent incident should not exploited into a religious and political issue.
Guan Eng should not be lambasted for something which he probably assumed is proper and harmless, since over the years, the Barisan Nasional federal government has been using tax monies from the gambling corporations and haram businesses like pubs and non-halal restaurants which serve alcoholic drinks, and also from workers in haram professions such as pork sellers, to fund government and public projects.
Now that we know that it is forbidden (haram) for our Muslim citizens to accept and use monies derived from non-halal sources, then the federal government should rectify the matter, and have a special separate account for all tax monies collected from the haram sources such as Sports Toto, Magnum, the Genting casino, the pubs, and the entertainment joints and restaurants selling alcoholic drinks. These monies must never ever be used in anything associated with Islam, or in projects which may involve the Muslims.
As for the tax monies collected from the haram sources, the federal government could use them for the building of Chinese and Tamil schools, temples, churches, cemeteries, or even scholarships for the non-Muslim students.
Let us look at the positive side of this incident, and learn from it. Don’t aggravate the situation to turn it into a religious issue…..

2. If you ever get haraam money, you should dispose of it by giving it away to the poor. Throwing it away is not correct. ...

3. From

For as long as I can remember and that goes back to the sixties, Malaysia has had some form or other of gambling - horse racing, social welfare lottery, 4D, Sports Toto, etc., now whether this is right or wrong is another question altogether (which the scope of this posting will not cover for now).

Some of which were legacies from our colonial past and some of which were new introductions after independence. All of them were and are still heavily regulated and heavily taxed by the federal government of the day, which in Malaysia's case had been the Alliance and BN government. In both instances, whether Alliance or BN, UMNO to which Azhar Ibrahim belongs is the real power behind the government. And they have been collecting huge amounts of "haram" money in the form of taxes for the treasury.

Over the course of many years, these "haram" money together with "halal" money (those which have not been lost through corruption) had been spent on subsidies and various social programs not to mention the bribes given each time elections comes around. I dare say that not a single Malaysian then and now have benefited in one way or another from "haram" money which the treasury collected.

I dare say that no one today can distinguish what is "haram" or "halal" money spent by the government not that they made any attempts to make that distinction in the first place. The reality is it is just impossible to make such a distinction.

In all those years,did Azhar or for that matter any politician from UMNO, ever once questioned if the federal government was being insensitive to pious Muslims by giving them "haram" money in one form or another? Why bring it up now when it involves the DAP state government of Penang? Why cause such anguish to those whom they claim they represent when they have been doing it for all these years since independence?

4. MUAR: Deputy Prime Minister Tan Sri Muhyiddin Yassin has called on Penang Chief Minister Lim Guan Eng to answer allegations made by Umno Youth on the state government's financial source to fund its poverty eradication programmes. Muhyiddin said Muslims would not want to be associated should gambling money were used for the programmes.(source: Bernama dated 25-9-2010,

And many more in the internet……

So actually what is the issue?

It is actually another political game played by the failed politician, who knows that the election is coming. But the playing up of the issue on old citizen is disrespect to the old citizen, the playing up of the issue without conclusive evidence is also considered a non-Halal act of accusation.

Why accuse the Chief Minister, when it is the state government decision; with the joint responsibility of all state exco members or the state cabinet. Politician should avoid personality attack, but focus on policy issues. if it is a good policy, the state government should stand firm. The ultimate decision and views of the people are more important, as they will open their eyes clearly on the issue.

Please stop playing the emotion of the innocent people over religion and racial issue to discredit the current state government. The political agenda behind the plot is clear to the Penang people. A good noble act by the state government cannot simply be constructed as bad by a “sour grape “politician. Any accusation without ground and evidence is political motivated. The accusation or any grievance should be support with evidence. We expected the game to continue as election is becoming closer… it is time the opposition need to know and act like a responsible opposition in the state.....lately there were too many issues playing up....

I call upon all citizen of Penang, regardless of race, religion, political background to reject this type of politician who bought instability to the state. They have deprived the elected state government of the valuable time which need to be used for the state affairs.

Penang lang, open our eyes….we need political peace for the state...

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