Taxman

2 min read

Never has this Beatles song been more relevant. I received my tax bill this morning. It was a bill for too many thousands. I was perplexed. I didn’t think I was making that much money to warrant a high tax rate. I scrutinized the notice from IRAS, the tax authority in Singapore. Something did not add up so I gave them a call. It turns out, I was right to be skeptical. They had taxed me as a non-resident owing to an erroneous data in my record. Non-residents are typically taxed higher than their local counterparts. They thought I had sojourned in the country for less than 183 days. It’s been two years. Had it not been for my accountant brain springing into action, carrying out a fast audit, I’d have paid the full amount just to get it over with. I would have lost a good chunk of my corporate exit fund to the taxman forever. I left the fiasco for our payroll department to fix.

Instances like this does make being an accountant handy. If a picture paints a thousand words, numbers too tell a story. The accountants are the storytellers, excel spreadsheets the manuscript. We analyse raw data, interpret numerical relationships and present a story that will ultimately help users make informed decisions. I sometimes have a bad habit of downplaying my occupation but it takes years of study and post grad certification to acquire even an iota of competence in the field.

My work is a specialized form of accounting called fund accounting. Some days, you have to squint harder to find the fun in it. I have not really been able to explain this to my friends and family. It’s so bespoke, it’s hard for the common man to comprehend. To put it in a rather plain manner, it’s a glorified bookkeeping job for hedge funds and their high net worth and institutional investor clients.

What the fuck is a hedge fund. You might ask. Well. To illustrate in the simplest form, say I approach a few of my friends and family and ask them to give me some of their money. I will not tell them what I’ll use it for, but I promise I’ll maximize it and make more money for them. No guarantees but they can have their money back any time they want. With the pooled money, I will buy whatever I like say bread and butter and sell these at a higher price. Sometimes if I don’t have bread, I will borrow bread from somebody else so I can sell them. Later, when the price of bread goes down, I’ll buy at that point and return the bread to the owner.

In the scenario I’ve just illustrated, I am the hedge fund manager. My friends and family are the high net worth and institutional investors. Bread and butter are the investments in stocks, bonds, real estate, et cetera. The buying and borrowing of bread are two of the most common strategies used, buy & hold and short selling. There’s a myriad of more complex strategies employed by hedge funds but this is the mechanism in a nutshell. Not just anyone can invest in a hedge fund. YOU. NEED. MONEY. I’m not talking about thousands. I’m talking millions, and billions of US dollar. The largest hedge funds pretty much control the entire fucking planet. We are at the mercy of the rich.

This is the internal battle I always contend with. The inequity I see sometimes makes me want to vomit.

Filed: Mundane