Monday, November 27, 2006

Zhuangzi, the professional adviser

Some readers may have dealt with professional tax advisers in the course of their work. The larger the business deal, the more senior will be the adviser. Let us say that a very huge sum of money is involved and senior partners of the advisory firm provide their expertise.

After you have briefed the adviser of the proposed transaction and the likely tax consequences, they may ask further questions to understand the transaction and come up with the best scenario to avoid or minimize the incidence of tax. When they have found the best tax plan for the intended transaction, they would be in their elements and can sometimes talk like Zhuangzi of the old:

“On the one hand if you do this, you would be taxed. On the other hand if you do that, you will pay higher taxes. If you do not transact then you will not be taxed but you would not make the gain that you want.”

“However if you do this and not that, do that and not this then you would be able to make the gain that you want and not pay any tax. If you are at your wits end trying to understand what has been said, it is alright. Just follow the tax plan accordingly, and everything will work out fine. You make your money, we get a fee and everyone will be happy (except the taxman) at the end of the day.”

If you do not believe that they talk like the sage, compare it with what Zhuangzi said in Chapter Two of his text:

Everything has its "that," everything has its "this." From the point of view of "that" you cannot see it, but through understanding you can know it. So I say, "that" comes out of "this" and "this" depends on "that" - which is to say that "this" and "that" give birth to each other. But where there is birth there must be death; where there is death there must be birth. Where there is acceptability there must be unacceptability; where there is unacceptability there must be acceptability. Where there is recognition of right there must be recognition of wrong; where there is recognition of wrong there must be recognition of right. Therefore the sage does not proceed in such a way, but illuminates all in the light of Heaven. He too recognizes a "this," but a "this" which is also "that," a "that" which is also "this." His "that" has both a right and a wrong in it; his "this" too has both a right and a wrong in it. So, in fact, does he still have a "this" and "that"? Or does he in fact no longer have a "this" and "that"? A state in which "this" and "that" no longer find their opposites is called the hinge of the Way. When the hinge is fitted into the socket, it can respond endlessly. Its right then is a single endlessness and its wrong too is a single endlessness. So, I say, the best thing to use is clarity.
[Burton Watson –]

Therefore if you ever go to seek advice from the best tax advisers in the country, unless you are a professional accountant and know something about tax, be prepared to meet those who talk like the ancient sage, otherwise you may come out of the meeting blurred and not knowing how to proceed.

Do not worry, the advisers will clarify what you have to do after you have confirmed their appointment and agree to their fees. So would Zhuangzi, for free, if you had clarity and listened carefully to his entire story in Chapter two – Discussion on making all things equal. No, unlike the tax professionals, he is not talking about balancing the books!

This entry is written especially for those who enjoyed watching the British TV comedian, Tommy Cooper in the 1970s who sometimes also talked a bit like the sage of old: ”Just like that! Not like that!”


LCL said...

Uncle Allan

Thank you for the stock tip on T share recently. I didn't get your message until it was too late and did not profit from your kind gesture. On the other hand, certain people have witheld, delayed and profited on the message. Some irritating people are still gloating and merry-making on your message meant for me. Instead, I have lost money. Sigh, thank you but no thanks!!


Allan said...

Hi CL and welcome!

If it is your luck to make money, no one could have stopped it. The oracle from the Zhouyi was entered in this blog a few weeks before the expected price rise of the T shares. I understand the information on my purchase of some T shares when the price was very low was passed on to both your father and you, as intended.

Perhaps like my elder brother, your father, you waited for the share price to go lower before buying? And if you had chased the T shares after its price had suddenly flared up to more than doubled go against the very grain of the various advices one had written in this blog. If both of you do not know when it is the right time to buy or sell shares or other investments, what more can I say? After all both your father and you are also professional accountants trained in London.

It is human nature to fear when share prices fall and greed takes over when share prices rise, I understand that. But to point fingers and blame people for your inadvertent loss, just goes to show that my earlier decision not to create wealth or luck for everyone is correct, since my main wish is to remain blameless.

Money does not grow on trees or fall from heaven. We all got to work for our wealth. If Yi diviners or questioners do not wish to lift a finger to follow Yi’s oracles, and expect everything to fall in place according to the prognostications, how wrong can that be?

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